Sanofi: Pre-quarterly Results Communication

Pre-quarterly Results Communication

Sanofi (EURONEXT: SAN and NYSE: SNY) has compiled the following items for consideration to assist in the financial modeling of the Group's Q3 2015 results.

Q3 2014 Business EPS

Sanofi's business EPS was €1.47 in Q3 2014.

Business Items

Japan

As previously communicated on July 30, 2015, multiple generic versions of Plavix^® have entered the market in Japan since the end of June 2015 and are expected to significantly impact Plavix^® sales in Japan in the second half of 2015. In Q3 2014, sales of Plavix^® in Japan were €190 million.

Praluent^®

Praluent^® was launched in the U.S. in Q3 2015. As previously communicated on July 30, 2015, Sanofi expects the uptake to be gradual, as the Group works on market access and builds awareness within the broader medical community.

Renagel^®/ Renvela^®

Since the beginning of the year, Renagel^®/ Renvela^® faces generic competition in several European countries. In Q2 2015 sales in Western Europe were down 15.2% at CER to €29 million. As of Q3 2015, there have been no generic approvals of Renagel^®/ Renvela^® in the U.S. market.

Lantus^®

As expected, a biosimilar of Lantus^® was launched in some European countries as well as in Japan in Q3 2015. 

Financial Results

Other revenues

As previously communicated on February 5, 2015, Sanofi expects other revenues in 2015 to be lower at constant exchange rates due to the loss of most royalties received on Enbrel^® EU sales starting from Q1 2015.

Operating expenses

As previously communicated, Sanofi expects its total operating expenses (R&D and SG&A) to increase by mid-single-digits at constant exchange rates in 2015 due to significant investments in new product launches and continued development of its late-stage pipeline.

In the first half of 2015, R&D expenses were down 1.0% at constant exchange rates (up 7.0% on a reported basis to €2,489 million) and SG&A expenses increased 6.2% at constant exchange rates (up 17.4% on a reported basis to €5,086 million).

R&D expenses are expected to be impacted in the second half of 2015 by the funding of the new immuno-oncology alliance with Regeneron, and Phase III trial of dupilumab in asthma. In the second half of 2015, SG&A expenses are expected to reflect investments in the launch of Praluent^®.

Other operating income net of expenses

The third quarter of 2014 included a gain of €40 million associated with the termination of a license of a U.S. product.

Tax Rate

As previously communicated on February 5, 2015, Sanofi estimates that its effective tax rate for 2015 will be approximately 25%.

Share of profits from associates

As of April 4, 2014, Sanofi accounts for its stake in Regeneron using the Equity method. At the end of Q3 2015, Sanofi held an ownership interest in Regeneron of 22.2%.

Foreign Currency Impact

The full year business EPS sensitivity to the U.S. Dollar, Japanese Yen and Russian Ruble are the following:

The main currency variations in Q3 2015 versus Q3 2014 were:

As previously communicated on July 30, 2015, the positive currency impact on 2015 full-year business EPS was estimated to be approximately +10%, assuming that exchange rates remained stable in Q3 and Q4 2015 at the average rates of June 2015.

Number of Shares

The average number of shares for EPS calculation was 1,305.5 million in Q3 2015.

Share Buyback

In Q3 2015, Sanofi bought back 2.6 million shares totaling €237 million. In the first nine months of 2015, Sanofi repurchased 16.5 million shares totaling €1.48 billion.

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2014. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.