Lantus dragged down diabetes, but Sanofi beat on sales, earnings anyway

Sanofi CEO Olivier Brandicourt

Sanofi ($SNY) beat expectations for sales and earnings this quarter. Both grew, even without an extra bounce from exchange rates. And for once, the diabetes blockbuster Lantus wasn't driving the caravan.

The French drugmaker brought in €8.8 billion, or about $9.85 billion, up 2.4% without the currency benefits. Earnings were €1.32 per share, several cents higher than analysts had expected. Pharma sales themselves were up 2.2% at constant exchange rates, to €7.5 billion.

All this despite diabetes sales that lagged behind last year's. Sanofi's franchise in the field was down 3.2% in constant currencies--and Lantus by itself was the cause of that. Lantus prices, to be exact: The blockbuster basal insulin delivered €1.6 billion in sales in Q1, down 5%, with sales in the U.S. down 13% "due to expected rebates required to maintain favorable formulary positions with key payers." Those contracts kicked in January 1.

The rest of Sanofi's diabetes products kicked in about €250 million. That included some single digits from new meds Lyxumia, Toujeo and Afrezza. Lyxumia isn't yet approved in the U.S., and Toujeo just launched this month; they brought in €8 million and €7 million, respectively.

As for Afrezza, the closely watched inhaled insulin launched in February in the U.S.--it accounted for €1 million in sales.

What else helped Sanofi eke out sales growth? Aubagio, for one. The multiple sclerosis pill developed by Sanofi's U.S. unit Genzyme saw sales grow 88.5% to $170 million. And together, Genzyme's products racked up $821 million in sales, a 30.9% increase.

Consumer healthcare was also up, at $979 million in sales, $142 million of that from Allegra the allergy med Sanofi took over the counter with its U.S. consumer business Chattem. Animal health was up even more--to $658 million--partly in thanks to gangbuster performance from NexGard, the unit's new flea and tick product for dogs; its sales doubled.

Vaccines were down by 4.6%, as influenza sales tanked. From €135 million in sales during last year's first quarter, flu shots dropped to just €22 million. Strain changes in the vaccine for the Southern Hemisphere--after a mismatch in viral strains for the Northern Hemisphere's flu season--delayed the usual vaccination campaigns.

Established brands--a.k.a., now-off-patent blockbusters such as the blood thinner Plavix--slipped a bit during the quarter. But generics were up by 10%, with U.S. and emerging markets sales both delivering.

"Overall, a decent Q1," said Bernstein analyst Tim Anderson in a note Thursday morning. Sanofi's brand-new CEO, Olivier Brandicourt, had a few more words to say: "Sanofi had a good start to 2015," he said. "Sanofi's recent launches along with the ongoing regulatory reviews and planned submissions before year-end will drive future growth. At this important time for the company, my primary focus will be on maximizing the value of this innovative product portfolio and further establishing Sanofi as a leading biopharmaceutical company."

- read the release from Sanofi

Special Reports: Top 15 pharma companies by 2014 revenue - Sanofi | The top 10 patent losses of 2015 - Lantus

Suggested Articles

Johnson & Johnson faces a litany of problems, but executives are clearly not concerned—at least not about the company's short-term fortunes.

This week, Goldman Sachs resurrected a burning question: How can pharma companies profit from curing patients with one-time gene and cell therapies?

CMS has determined how it'll pay for Gilead's CAR-T cancer therapy, Yescarta, for outpatient use, but hasn't yet decided on Gilead's…