Sanofi Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Sanofi reported €14.4 billion in sales, up 14.3% at constant exchange rates, with business operating income and EPS both rising nearly 20%. The company raised its 2026 guidance to 13%–15% sales growth and 15%–17% business EPS growth.
• Dupixent remains the key growth engine: The drug generated €5.7 billion in quarterly sales and reached more than 1.5 million patients globally. Sanofi expects demand to continue growing in 2027, although growth rates may moderate as competition increases.
• Portfolio and R&D reshaping: Sanofi is concentrating on immunology, rare diseases and vaccines, while discontinuing two development programs and expanding its Regeneron partnership with four next-generation antibody candidates. Planned divestments and exits from margin-dilutive businesses are expected to reduce 2027 sales but support long-term margin growth.

Sanofi NASDAQ: SNY reported third-quarter 2026 sales growth of 14.3% at constant exchange rates, supported by continued demand for Dupixent, recently launched medicines and growth in rare diseases. The company also raised its full-year sales and business EPS outlook while outlining a strategy focused on immunology, rare diseases and vaccines.

Total third-quarter sales reached €14.4 billion. Business operating income rose 19.7%, while business EPS increased 19.6%, according to Chief Financial Officer François Roger. Gross margin improved by 2.1 percentage points, supported by product mix and pricing effects, while operating expenses were broadly stable.

“Our total sales reached EUR 14.4 billion, up 14.3% versus last year,” Chief Executive Officer Belén Garijo said. She said growth was led by Dupixent, new pharmaceutical launches and the company’s diabetes portfolio, partly offset by divestments and legacy medicines.

Dupixent Remains Main Growth Driver

Dupixent sales reached €5.7 billion during the quarter, with more than 1.5 million patients receiving treatment globally. U.S. growth reflected demand as well as favorable gross-to-net pricing adjustments, while international growth was driven by expansion across major indications in markets including Germany, France, Japan, Canada and China.

Manuela Buxo, Sanofi’s executive vice president and head of specialty care, said the company expects Dupixent demand growth to continue in 2027, although percentage growth will moderate as the treatment’s revenue base increases and additional competitors enter the market. She noted that advanced-therapy penetration in atopic dermatitis remains low, leaving room for market expansion.

Roger said the company estimates that underlying group sales growth, excluding more one-off items, was about 12% in the third quarter. He said more than 85% of growth was demand-driven and recurring rather than attributable to exceptional pricing or operational items.

Sanofi continues to target Dupixent sales of €25 billion by 2030 at constant exchange rates. Management did not raise that target, although Roger said the company would seek to exceed it if possible.

New Launches and Rare Diseases Add to Growth

Sales from Sanofi’s portfolio of recently launched medicines and vaccines totaled approximately €2.2 billion, up 19.2% from a year earlier. The portfolio represented roughly 15% of company sales. Growth was led by ALTUVIIIO, Ayvakit and Rezurock.

The rare-disease portfolio generated €1.9 billion in sales, rising 12.6%. Ayvakit benefited from an increasing number of patients starting treatment, while ALTUVIIIO continued to contribute to rare-blood growth. The company said sales of treatments for lysosomal storage disorders remained resilient despite temporary supply constraints affecting certain Pompe medicines.

Vaccine sales declined 7% in the quarter, less than the low-to-mid-teens decline Sanofi had anticipated in July. The decline reflected respiratory-vaccine sales phasing, though later-than-expected Beyfortus purchasing helped offset lower influenza vaccine sales. Heplisav-B sales rose 60% on a pro forma basis to €125 million.

Sanofi now expects vaccine sales to decline by a low-single-digit percentage for the full year.

Guidance Raised as Company Pursues Portfolio Changes

Sanofi raised its 2026 outlook and now expects sales growth of 13% to 15% and business EPS growth of 15% to 17%, both at constant exchange rates.

Roger said the end of Regeneron’s development-cost reimbursement will create a business operating income headwind of about €500 million in the second half of 2026, split evenly between the third and fourth quarters. The company expects higher AMVUTTRA royalties to fully offset the reimbursement impact for the full year.

Looking to 2027, Roger said pricing is expected to revert to its historical pattern of a slightly negative contribution to sales growth. Sanofi also expects its transactions involving Cheplapharm and the sale of Medley, its Brazilian generics business, to reduce 2027 sales by approximately €1.3 billion. He said those moves would allow the company to exit margin-dilutive businesses and focus resources on science-led areas.

Management expects business operating income and operating margin to rise in 2027 and in each year through 2030, despite the reimbursement headwind carrying into the first half of 2027.

R&D Reset Includes Program Discontinuations and Regeneron Expansion

Garijo said Sanofi has confirmed its focus on immunology, rare diseases and vaccines, while pursuing external innovation, business development and acquisitions. The company intends to prioritize later-stage or commercial assets as it prepares for Dupixent’s eventual loss of exclusivity.

As part of a pipeline review, Sanofi discontinued amlitelimab in atopic dermatitis and itepekimab in chronic obstructive pulmonary disease and chronic rhinosinusitis. Paolo Fontoura, Sanofi’s new head of R&D, said the decisions followed reviews of available data and the competitive landscape.

Fontoura said the company has 61 development projects across pharmaceuticals and vaccines, including 36 new molecules. He outlined plans to increase the use of artificial intelligence in drug discovery and development, strengthen technical review processes, pursue a more focused portfolio and expand access to external innovation, including in China.

• Sanofi expanded its alliance with Regeneron to include four next-generation long-acting monoclonal antibodies targeting type 2 inflammation.
• An anti-IL-13 candidate is in Phase I development for atopic dermatitis, with registrational studies potentially beginning in late 2027 or early 2028.
• Three additional candidates are expected to enter Phase I trials in 2027, including anti-IL-4 receptor alpha, anti-IL-4 and bispecific IL-4/IL-13 antibodies.
• Sanofi expects Phase II data next year for lunsekimig in high-risk asthma and brivekimig in hidradenitis suppurativa, followed by several Phase III readouts.

Garijo said Sanofi plans to provide more detail on its disease-area priorities, R&D turnaround, capital-allocation framework and approach to business development and M&A at a strategic update before year-end.

About Sanofi (NASDAQ:SNY)

Sanofi is a France-based global healthcare company that researches, develops, manufactures and markets prescription medicines and vaccines. Its operations focus primarily on specialty medicines, immunology, rare diseases, neurology, oncology and treatments for rare blood disorders, as well as established pharmaceutical products.

The company's portfolio includes Dupixent, an immunology medicine developed with Regeneron; vaccines for influenza, polio, meningitis and other infectious diseases; and treatments for conditions including multiple sclerosis, hemophilia and certain rare diseases.

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