Sanofi: Net sales up 10.1% and Business net income(1) up 4.1% at CER(2)
- Performance driven by growth platforms, Genzyme acquisition and cost savings -
PARIS, Nov. 3, 2011 /PRNewswire/ --
(Logo: http://photos.prnewswire.com/prnh/20110616/NY20158LOGO )
Change at Change at
Change on a constant Change on a constant
reported exchange 9 months reported exchange
Q3 2011 basis rates 2011 basis rates
------- ----------- --------- -------- ----------- ---------
euro euro
Net sales 8,753m +5.0% +10.1% 24,881m +1.4% +4.1%
Business net euro
income(1) 2,398m -3.0% +4.1% euro 6,718m -8.9% -6.3%
------------ ------ ---- ---- ----------- ---- ----
Business EPS(1) euro 1.79 -5.3% +1.6% euro 5.09 -9.9% -7.3%
--------------- --------- ---- ---- --------- ---- ----
In order to facilitate an understanding of our operational performance, we comment on our business net income statement. Business net income(1) is a non-GAAP financial measure. The consolidated income statement for the first 9 months of 2011 is provided in Appendix 7. A reconciliation of business net income to consolidated net income is provided in Appendix 6. Consolidated net income for the first 9 months of 2011 was euro 4,254 million, compared to euro 5,030 million for the first 9 months of 2010. Consolidated EPS for the first 9 months of 2011 was euro 3.23. versus euro 3.85 for the first 9 months of 2010.
Commenting on the Group's performance in Q3 2011, Sanofi Chief Executive Officer, Christopher A. Viehbacher said, "The return to growth in sales and earnings in the third quarter reflects an important milestone as the company progressively puts the patent cliff behind it. The integration of Genzyme is progressing well. Our growth platforms(3) again achieved double digit growth and more than compensated for generic erosion. We continue to make strong progress in R&D with the submission of five new products and also in the tight control of our costs."
Q3 2011 Performance
Total sales(4) grew 10.1%(5) to euro 8,753 million. Excluding Genzyme, sales were stable despite euro 471 million of sales lost due to generic competition vs. Q3 2010.
Growth platforms grew by 11.1% (excluding A/H1N1 sales) led by strong performances in Diabetes, Vaccines and Consumer Health Care. Growth platforms and Genzyme accounted for 68.5% of total sales.
Diabetes sales increased 12.4% driven by a strong performance in the U.S. and in Emerging Markets(6) where Lantus® recorded sales growth of 14.6% and 23.4%, respectively.
Vaccines grew 16.7% reflecting solid demand for seasonal flu vaccines in the U.S. coupled with an early shipment.
Genzyme sales were euro 768 million, up 6.9%(7).
Sales in Emerging Markets(6) were euro 2,565 million, an increase of 6.8% (or 12.0% including Genzyme). Sales in BRIC countries were up 20.2% (or 24.2% including Genzyme).
Consumer Health Care sales were euro 665 million (+20.3%), supported by a successful Allegra® OTC launch in the U.S. (euro 43 million).
Merial sales were euro 470 million, a decrease of 5.2% reflecting the temporary generic competition of Frontline® Plus in the U.S.
Business EPS(1) was up 1.6% at euro 1.79 at CER despite the impact of several exclusivity losses.
Outlook
Five new products were recently submitted: Lyxumia® (lixisenatide) in the EU, Aubagio(TM) (teriflunomide) and Zaltrap(TM) (aflibercept) in the U.S.; Visamerin®/Mulsevo® (semuloparin) in the U.S. and EU; Kynamro(TM) (mipomersen) in the EU.
The Group continues to expect 2011 business EPS(1) to be 2% to 5% lower than 2010 business EPS(8) at CER, barring major unforeseen adverse events.
(1) See Appendix 8 for definitions of financial indicators; (2) At Constant Exchange Rate; (3) See Appendix 4; (4) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 8 for a definition); (5) Q3 2010 includes consolidated Merial sales (euro 518 million); (6) See definition on page 8; (7) on a constant structure basis and at constant exchange rates; (8) euro 7.06
2011 third quarter and 9-month net sales
Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates(1).
Net sales in the third quarter of 2011 were euro 8,753 million, an increase of 5.0% on a reported basis. Exchange rate movements had a negative effect of 5.1 percentage points, mainly due to a less favorable euro/U.S. dollar parity. Various currencies from Emerging Markets (notably the Venezuelan Bolivar and Turkish Lira) also had an unfavorable impact. At constant exchange rates, and including changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 10.1%.
In the first 9 months of 2011, net sales were euro 24,881 million, up 1.4% on a reported basis. Exchange rate movements had an unfavorable effect of 2.7 percentage points. The impact of the depreciation of the U.S. dollar, Venezuelan Bolivar and Turkish Lira against the Euro was reduced by the favorable effect of the Japanese Yen and Australian dollar. At constant exchange rates, and accounting for changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 4.1%.
Growth Platforms (see Appendix 4)
Third-quarter sales of the Group's growth platforms grew by 10.4% or 11.1% excluding A/H1N1 vaccines sales. Including Genzyme, the Group's growth platforms accounted for 68.5% of total consolidated sales, which is up from 60.2% in the third quarter of 2010. In the first 9 months, the growth platforms and Genzyme comprised 64.5% of total consolidated sales compared with 56.4% over the same period of 2010. Year-to-date sales growth of growth platforms was 11.9% excluding A/H1N1 vaccines sales.
Pharmaceuticals
Pharmaceuticals net sales reached euro 6,940 million (up 10.0%) in the third quarter, which reflects the positive contribution (euro 768 million) from Genzyme (consolidated from April 1st, 2011) as well as generic competition to Lovenox®, Ambien® CR and Taxotere® in the U.S., Plavix® and Taxotere® in the EU and the impact of U.S. healthcare reform and EU austerity measures. Year-to-date 2011 net sales were euro 20,670 million, an increase of 5.5%.
Flagship Products(9)
--------------------
Change at 9-month Change at
(millions of euros) Q3 2011 constant 2011 constant
------------------- ------- ---------- ------- ----------
net sales exchange rates net sales exchange rates
--------- -------------- --------- --------------
Lantus(R) 968 +14.6% 2,862 +14.1%
Apidra(R) 53 +22.2% 155 +24.2%
Plavix(R) 517 +3.8% 1,511 -4.5%
Lovenox(R) 494 -12.7% 1,613 -26.1%
Aprovel(R) 314 -5.6% 977 -2.1%
Eloxatin(R) 310 +179.2% 746 +182.9%
Taxotere(R) 186 -64.8% 772 -54.1%
Multaq(R) 66 +52.2% 197 +88.1%
Jevtana(R) 45 +14.6% 141 +256.1%
Cerezyme(R) 141 +7.0%* 307** +29.9%*
Myozyme(R) /
Lumizyme(R) 101 +27.2%* 200** +34.5%*
Renagel(R) / Renvela(R) 135 +6.7%* 272** +10.5%*
Synvisc(R) 80 +11.3%* 169** +14.5%*
-------- --- ------- ----- -------
* on a constant structure basis and at constant exchange
rates;** Net sales since April 1st 2011
(1) See Appendix 8 for definitions of financial indicators
(9) See Appendix 2 for a geographical split of consolidated net sales by product
Diabetes
Third-quarter sales of the Diabetes division grew 12.4% to euro 1,161 million reflecting strong growth of Lantus® in the U.S. (+14.6% to euro 580 million) and Emerging Markets (+23.4% to euro 149 million). In Western Europe, Lantus® sales increased by 7.1% (euro 182 million). In the third quarter, Lantus® SoloSTAR® represented 47.2% of total Lantus® sales in the U.S., an increase of 14.9 percentage points versus the fourth quarter of 2009. The growth of Lantus® in Japan (+15.1%) was also strong. In Emerging Markets, sales of Lantus® doubled in China (+103.5%) and benefited from the inclusion into the reimbursement scheme of the largest provincial markets, Shanghai (December 2010) and Beijing (July 2011). In Latin America, sales of Lantus® were up 31.4%. Year-to-date sales of Lantus® reached euro 2,862 million, up 14.1%.
Net sales of the rapid-acting insulin analog Apidra® were euro 53 million in the third quarter, up 22.2%. Sales in the U.S. increased by 40% (euro 20 million) reflecting the benefit of our new commercial approach. Year-to-date net sales of Apidra® reached euro 155 million, an increase of 24.2%. A temporary shortage of Apidra® 3mL cartridges, will impact supplies potentially until early 2012 in some markets. Apidra® vials are not impacted.
Despite 10.9% growth in Emerging Markets, net sales of Amaryl® decreased 7.4% (to euro 106 million) due to generic competition in Japan. Year-to-date sales of Amaryl® were euro 323 million, down 7.6%.
Year-to-date sales of the Diabetes division increased by 11.8% to euro 3,442 million.
Oncology
Eloxatin® achieved net sales of euro 310 million (up 179.2%) in the third quarter, reflecting the full recovery of U.S. sales (euro 245 million, versus euro 56 million in the third quarter of 2010). Year-to-date sales of the product were euro 746 million, an increase of 182.9%. In September, the U.S. District Court for the District of New Jersey ruled against Sun Pharmaceuticals in favor of Sanofi U.S. with respect to a contractual dispute arising from the resolution of the Eloxatin® patent litigation. This ruling, which Sun Pharmaceuticals is contesting, maintains the U.S. market exclusivity of Eloxatin® through August 9, 2012.
As expected, net sales of Taxotere® decreased by 64.8% to euro 186 million in the third quarter reflecting generic erosion in the U.S. (sales down 85.3% to euro 27 million) and in Western Europe (sales down 78.4% to euro 41 million). Year-to-date sales of Taxotere® were euro 772 million, down 54.1%. Over the period, Taxotere sales generated outside the U.S. and Western Europe amounted to euro 377 million.
Third-quarter net sales of Jevtana® were euro 45 million. Sales in the U.S. and in Western Europe reached euro 26 million and euro 15 million, respectively. Commercialization of Jevtana® is now underway in most Western European countries. Year-to-date sales of Jevtana® were euro 141 million.
Worldwide presence(1) of Plavix®/Iscover®
The worldwide presence of Plavix® was euro 1,738 million, up 6.5%, in the third quarter. Sales in the U.S. (consolidated by Bristol-Myers Squibb) were euro 1,185 million, up 9.0%. In Japan and China, Plavix® continued to show strong growth of 20.1% (to euro 162 million) and 28.5% (to euro 72 million), respectively. Sales in Europe declined by 21.0% to euro 143 million, due to generic competition. In the first 9 months of 2011, the worldwide presence of Plavix® totaled euro 5,240 million, an increase of 6.1%. Year-to-date consolidated sales in Japan and China were euro 463 (up 23.0%) and euro 203 million (up 29.1%), respectively. On October 18, 2011, in the damages phase of the Plavix® patent infringement case against Apotex, the U.S. Court of Appeals upheld the damages award granted to Sanofi and BMS in the amount of $442.2 million.
(1) See Appendix 8 for definitions of financial indicators
Worldwide presence of Plavix(R)/Iscover(R): geographic split
--------------------------------------------------------
Change at Change at
(millions of euros) Q3 2011 constant 9-month 2011 constant
------------------- ------- --------- ------------ ---------
exchange rates exchange rates
-------------- --------------
Europe 143 -21.0% 445 -31.3%
United States 1,185 +9.0% 3,600 +11.1%
Other Countries 410 +11.9% 1,195 +12.7%
--------------- --- ----- ----- -----
TOTAL 1,738 +6.5% 5,240 +6.1%
----- ----- ---- ----- ----
Worldwide presence(1) of Aprovel®/Avapro®/Karvea®/Avalide®
The worldwide presence of Aprovel® was euro 434 million, down 15.2% in the third quarter reflecting the growing penetration of Losartan generics. In the first 9 months of 2011, the worldwide presence of Aprovel® totaled euro 1,384 million, a decrease of 11.0%. Year-to-date consolidated sales of the product in Emerging Markets reached euro 276 million, up 8.6%.
Worldwide presence of Aprovel(R)/Avapro(R)/Karvea(R): geographic
split
----------------------------------------------------------------
Change at Change at
(millions of euros) Q3 2011 constant 9-month 2011 constant
------------------- ------- --------- ------------ ---------
exchange rates exchange rates
-------------- --------------
Europe 207 -9.6% 627 -12.8%
United States 86 -28.5% 295 -21.0%
Other Countries 141 -12.5% 462 +0.2%
--------------- --- ----- --- ----
TOTAL 434 -15.2% 1,384 -11.0%
----- --- ----- ----- -----
Other Pharmaceutical Products
Third quarter net sales of Lovenox® (euro 494 million, down 12.7%) were impacted by generic competition in the U.S. (euro 133 million, down 42.4%). Lovenox® continued to show solid performance outside the U.S. with a sales increase of 8.7% in Western Europe (to euro 199 million) and 11.6% in Emerging Markets (to euro 137 million). Year-to-date sales of Lovenox® were euro 1,613 million, down 26.1%. Sales generated outside the U.S. were euro 1,098 million (up 8.3%), or 68.1% of total Lovenox sales. In September 2011, the FDA approved Amphastar Pharmaceuticals' version of enoxaparin. In October, Sanofi, through its generic business Winthrop, launched an authorized generic of Lovenox® in the U.S.
Net sales of Multaq® reached euro 66 million in the third quarter, of which euro 46 million was generated in the U.S. and euro 17 million in Western Europe. Year-to-date sales of Multaq® were euro 197 million. Following its review, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) confirmed in September that the benefits of Multaq® continue to outweigh the risks with a revised indication for the treatment of a newly defined population of paroxysmal and persistent Atrial Fibrillation patients. Multaq® is indicated for the maintenance of sinus rhythm after successful cardioversion in adult clinically stable patients with paroxysmal or persistent atrial fibrillation. Due to its safety profile, Multaq® should only be prescribed after alternative treatment options have been considered and should not be given to patients with left ventricular systolic dysfunction or to patients with current or previous episodes of heart failure. The benefit/risk assessment of Multaq® by other regulatory agencies is ongoing.
Third-quarter net sales of the Ambien® family of products decreased by 43.6% (to euro 121 million), due to generic competition to Ambien®CR in the U.S. (Ambien® sales in the U.S. were down 81.0%). In Japan, Myslee®, showed 7.3% growth to euro 69 million in the third quarter. Year-to-date sales of the Ambien® family were euro 353 million of which euro 64 million was for Ambien®CR in the U.S. (Ambien® sales in the U.S. were down 82.5%). Year-to-date sales of Myslee® in Japan totaled euro 198 million, up 9.5%.
Third quarter net sales of Allegra® as a prescription drug, were euro 103 million of which euro 75 million (up 4.0%) was generated in Japan. Allegra® moved to the OTC market in the U.S. in March 2011 (sales reported in CHC). Year-to-date sales of Allegra® as a prescription drug, were euro 438 million, 80% of which (euro 349 million) was generated in Japan and increased by 25.8%.
Net sales of Copaxone® were euro 117 million, down 6.4% in the third-quarter, reflecting the end of the co-promotion agreement in certain countries notably the U.K. in the fourth quarter of 2010. Year-to-date sales of the product reached euro 350 million, down 10.1%.
Genzyme(10)
-----------
(millions of Change on a Net sales Change on a
euros) Q3 2011 constant since constant
------------ ------- ------------ ---------- ------------
structure basis and April 1st structure basis and
net sales at 2011 at
--------- ------------------- ---------- --------------------
constant exchange constant exchange
rates rates
------------------ -----------------
Cerezyme(R) 141 +7.0% 307 +29.9%
Myozyme(R) /
Lumizyme(R) 101 +27.2% 200 +34.5%
Fabrazyme(R) 32 +24.9% 62 +14.0%
Renagel(R)/Renvela(R) 135 +6.7% 272 +10.5%
Synvisc(R) 80 +11.3% 169 +14.5%
Total Genzyme 768 +6.9% 1,564 +11.5%
------------- --- ---- ----- -----
Third quarter sales of Genzyme reached euro 768 million, an increase of 6.9% over the third quarter of 2010.
Net sales of Cerezyme® were euro 141 million in the third quarter, an increase of 7.0%. Quarterly sales were impacted by reduced product availability during the quarter.
Net sales of Myozyme®/Lumizyme® were euro 101 million, an increase of 27.2%. Growth in the third quarter was driven by continued expansion of Lumizyme® in the U.S. and volume growth across all geographies.
Net sales of Fabrazyme® in the third quarter were euro 32 million, up 24.9% from the third quarter of 2010. The increase was driven by greater availability of the product compared to the third quarter of 2010.
Sales of Renvela®/Renagel® were euro 135 million in the third quarter, an increase of 6.7%. Growth in the third quarter was driven by continued U.S. market share growth, which reached an all time high of 53.1% in September, and European adoption of Renvela®, particularly in the chronic kidney disease segment.
Net sales of Synvisc®/Synvisc One® were euro 80 million, up 11.3% due to continued growth in the U.S. and in Japan.
Genzyme announced in early October that a temporary decrease in Cerezyme® production yields, and changes to product release processes and procedures had lengthened the overall time it takes to release Cerezyme®. These changes required Genzyme to temporarily reduce global supply allocations from the period of October 2011 through January 2012. Genzyme continues to expect an improving Cerezyme® supply outlook from February 2012 forward.
Genzyme has maintained consistent supply of Fabrazyme® to current patients at a reduced dose throughout 2011. To return to normal supply levels of Fabrazyme® for existing and new patients, it will be necessary to utilize the additional capacity from Genzyme's new manufacturing facility in Framingham. The company has made substantial progress over the past few months to achieve regulatory milestones so that Fabrazyme® made in Framingham can be provided to patients. Because of the progress made to date, the company continues to expect to begin providing product made in Framingham during the first quarter of 2012. The complete return to normal supply levels will not be immediate, as it will take time to obtain all global regulatory approvals and build inventory.
Genzyme also continues to make progress at its Allston manufacturing facility, and has satisfied all requirements of the consent decree to date. Genzyme has also ceased all fill/finish operations within the Allston facility in accordance with the requirements of the consent decree. In addition, Genzyme has completed the previously announced expansion at its Waterford, Ireland manufacturing facility, which will triple the fill/finish capacity at the plant upon approval.
(10) Historical Genzyme perimeter; sales growth of Genzyme are stated on a constant structure basis and at constant exchange
Consumer Health Care
Third-quarter sales of the Consumer Health Care (CHC) business grew 20.3% to euro 665 million supported by Allegra® OTC in the U.S. (euro 43 million) and the positive impact from acquisitions (mainly BMP Sunstone in China). Year-to-date sales of CHC totaled euro 2,021 million, up 25.3%. Year-to-date sales of Allegra® OTC in the U.S. reached euro 186 million reflecting the successful Rx-to-OTC switch by Chattem.
In August, Aventis Pharma Limited (an Indian subsidiary of Sanofi) announced that it entered into an agreement to acquire Universal Medicare Private Limited's business of marketing and distribution of branded nutraceutical formulations in India. With this acquisition, Aventis Pharma will advance its sustainable growth strategy in India and facilitate the creation of a Consumer Health Care platform in that country. The transaction is expected to close in Q4 2011 subject to certain conditions precedent.
Generics
Third-quarter sales of the generics business grew 9.2% to euro 410 million in the third quarter, led by the U.S. and Emerging Markets. Sales in Emerging Markets reached euro 264 million, up 9.9% supported by Latin America (+14.4%). In the U.S., the performance (+40.9% to euro 29 million) is attributable to the recently launched authorized generic of Taxotere® (sales of $29 million) and Ambien®CR (sales of $11 million). Year-to-date sales of the generics business grew by 14.5% to euro 1,258 million.
Human Vaccines
Third-quarter consolidated net sales for the Human Vaccines business totaled euro 1,343 million, an increase of 16.7% (or 19.9% excluding euro 33 million of A/H1N1 vaccines sales booked in Q3 2010), driven by the performance of seasonal influenza vaccines in the U.S. Year-to-date consolidated net sales for the Human Vaccines business totaled euro 2,651 million, an increase of 12.7% excluding A/H1N1 influenza vaccine sales booked in 2010, or a decrease of 4.7% including A/H1N1 vaccines sales.
Net sales of seasonal influenza vaccines were euro 602 million in the third quarter, up 42.6% supported by solid demand coupled with an early supply in the U.S. (sales of euro 410 million, up 58.1%). In the U.S., our offering has been further differentiated with the launch last year of Fluzone® High Dose and this year with Fluzone® Intradermal which was approved by the FDA in May. Fluzone® Intradermal is the first influenza vaccine licensed in the U.S. that uses a novel microinjection system for intradermal delivery. The first doses of Fluzone® Intradermal were shipped in September and the limited launch in 2011 will focus on the education of patients and healthcare professionals. Year-to-date sales of seasonal influenza vaccine reached euro 760 million, an increase of 42.5%.
Sales of Polio/Pertussis/Hib vaccines were euro 256 million, up 15.3% in the third quarter, reflecting the success of Pentaxim® and the recovery in sales of haemophilus influenzae type b vaccines in Japan. Sales of Pentaxim® (5-in-1 combination vaccine against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b) were euro 53 million, up 18.5% reflecting sustained growth in Emerging Markets and its recent launch in China. Year-to-date sales of Polio/Pertussis/Hib vaccines sales totaled reached euro 750 million, up 7.8%, including euro 174 million of Pentaxim® sales (+26.0%) and euro 223 million of Pentacel® sales (+6.5%).
Third-quarter net sales of Menactra® were euro 195 million, an increase of 10.2% led by good performance in the U.S. Menactra® benefited in the U.S. from the ACIP (Advisory Committee on Immunization Practices) recommendation of a booster dose for adolescents. Year-to-date sales of Menactra® totaled euro 334 million, down 2.4%.
Net sales of adult boosters reached euro 122 million, down 10.3% in the third quarter due to comparatively high sales in Q3 2010 as a result of U.S. pertussis outbreaks. Over the quarter, sales of Adacel® were euro 93 million, down 6.5%. Year-to-date sales of adult boosters totaled euro 328 million, an increase of 4.2%, including euro 224 million of Adacel® sales (up 7.9%).
Net sales of Travel and other endemic vaccines were euro 98 million (up 5.2%) and euro 269 million (down 5.5%) in the third quarter and the first 9 months, respectively.
Consolidated vaccines sales
---------------------------
(millions of Change at 9-month Change at
euros) Q3 2011 constant 2011 constant
------------ ------- ---------- -------- ----------
net sales exchange rates net sales exchange rates
--------- -------------- --------- --------------
Influenza
Vaccines
(incl.
Vaxigrip(R)
and
Fluzone(R)) 602 +33.1% 760 -21.0%
of which
seasonal
vaccines 602 +42.6% 760 +42.5%
of which
pandemic
vaccines 0 -100.0% 0 -100.0%
--------- --- ------ --- ------
Polio/
Pertussis/
Hib Vaccines
(incl.
Pentacel(R)
and
Pentaxim(R)) 256 +15.3% 750 +7.8%
Meningitis/
Pneumonia
Vaccines
(incl.
Menactra(R)) 212 +4.9% 395 -4.0%
Adult Booster
Vaccines
(incl.
Adacel (R)) 122 -10.3% 328 +4.2%
Travel and
Other
Endemics
Vaccines 98 +5.2% 269 -5.5%
Other
Vaccines 53 +19.2% 149 +31.8%
--------- --- ----- --- -----
TOTAL 1,343 +16.7% 2,651 -4.7%
----- ----- ----- ----- ----
Net sales of Sanofi Pasteur MSD (not consolidated by Sanofi), the joint venture with Merck & Co in Europe, recorded third quarter net sales of euro 260 million, down 13.5% on a reported basis. Gardasil® sales were euro 41 million, down 34.7% on a reported basis. Year-to-date net sales of Sanofi Pasteur MSD were euro 568 million (down 14.3% on a reported basis), reflecting a decrease in Gardasil® sales.
Animal Health
Third-quarter net sales of Merial were euro 470 million, a decrease of 5.2% reflecting the temporary generic competition of Frontline® Plus in the U.S. during the quarter.
On June 21, the U.S. District Court for the Middle District of Georgia ruled in favor of Merial holding that sales of PetArmor(TM) Plus products infringed Merial's patent and barred Cipla and Velcera from making or selling those products in the U.S. A court-ordered seizure of the inventory in the U.S. still in possession of the generic manufacturers went into effect on August 21, 2011. However, the generic products already sold to retailers were not recalled and may still be available in the distribution channels.
In the third quarter, sales of the companion animals segment were euro 295 million, down 10.4%, impacted by a 15.3% decrease of Frontline® family sales. In July, Merial launched a new combination parasiticide, Certifect®, in the U.S. which is a new topical flea and tick control product for dogs.
Sales of the production animals segment were euro 175 million (up 5.4%) in the third quarter, led by the solid performance of the Ruminant segment driven by the launch in the U.S. of the antibiotic Zactran® against bovine respiratory disease.
Year-to-date net sales were euro 1,560 million, an increase of 2.7%. Over this period, sales of the companion animals segment were stable euro 1,029 million, despite a slight decrease in Frontline® family sales (down 1.8%) to euro 632 million. Year-to-date sales of the production animals segment grew by 8.3% to euro 532 million and were driven by the performance of the Avian segment which benefited from the success of the vaccine Vaxxitex® and the solid performance of Ruminant segment. Year-to-date sales in Emerging Markets grew by 11.4% to euro 359 million.
Net sales by geographic region
------------------------------
(millions 9-month
of euros) Q3 2011 Change at 2011 Change at
--------- ------- --------- -------- ---------
net sales Constant net sales Constant
--------- -------- --------- --------
exchange exchange
rates rates
-------- --------
United
States 2,902 +15.5% 7,482 +5.8%
Western
Europe* 2,291 -0.1% 6,922 -4.4%
Emerging
Markets** 2,565 +12.0% 7,484 +7.3%
of which
Eastern
Europe
and
Turkey 649 +0.5% 1,999 +1.5%
of which
Asia 631 +21.1% 1,782 +15.8%
of which
Latin
America 802 +18.5% 2,283 +7.0%
of which
Africa 240 +7.0% 710 +8.2%
of which
Middle
East 217 +8.2% 635 +6.7%
-------- --- ---- --- ----
Rest of
the
world*** 995 +14.6% 2,993 +14.4%
--------- --- ----- ----- -----
of which
Japan 657 +22.9% 2,025 +21.2%
-------- --- ----- ----- -----
TOTAL 8,753 +10.1% 24,881 +4.1%
----- ----- ----- ------ ----
* France, Germany, UK, Italy, Spain, Greece, Cyprus,
Malta, Belgium, Luxembourg, Portugal, Netherlands,
Austria, Switzerland, Sweden, Ireland, Finland,
Norway, Iceland, Denmark
** World less the U.S. and Canada, Western Europe,
Japan, Australia and New Zealand
*** Japan, Canada, Australia and New Zealand
Net sales in Emerging Markets in the third quarter reached euro 2,565 million, an increase of +12.0% or +6.8% excluding Genzyme. Outside Eastern Europe/Turkey, Emerging Markets sales were up 16.4% (or 11.5% excluding Genzyme). BRIC countries sales were euro 901 million, up +20.2% excluding Genzyme. Asia and Latin America continued to deliver strong double digit sales growth of +17.5% and 12.0%, respectively (excluding Genzyme). Sales in China were euro 269 million, up 47.2% (excluding Genzyme), supported by continued strong performance of Plavix® (+28.5% to euro 72 million), doubling of Lantus® (+103.5%) and the contribution from BMP Sunstone. Sales in Brazil were euro 409 million, up 19.2% (excluding Genzyme), led by CHC and Vaccines. Sales in Eastern Europe/Turkey were euro 649 million, down 5.4% (excluding Genzyme) reflecting decreased sales in Turkey which was impacted by price cuts and generic competition for Taxotere® as well as lower sales in some countries. Sales in Russia were euro 166 million, down 0.5%, reflecting lower sales of Vaccines and Generics. Year-to-date sales in Emerging Markets were euro 7,484 million, an increase of 9.1% excluding Genzyme and A/H1N1 vaccines (euro 361 million).
Net sales in the U.S. totaled euro 2,902 million in the third quarter, an increase of 15.5% (or +0.5% excluding Genzyme), reflecting the acquisition of Genzyme (sales of euro 378 million). Sales in the U.S. were impacted by generics of Taxotere®, Lovenox® and Ambien®CR, which was partially offset by growth for Lantus® and Eloxatin®. Year-to-date sales in the U.S. reached euro 7,482 million (up 5.8 % and down 5.3% excluding Genzyme).
Third-quarter sales in Western Europe were stable at euro 2,291 million. Excluding Genzyme, sales were down 9.2% reflecting generic competition for Taxotere® and Plavix®, as well as the impact of austerity measures. Year-to-date sales in Western Europe were euro 6,922 million (down 4.4% and down 10.7% excluding Genzyme).
Third quarter net sales in Japan reached euro 657 million, up +22.9% (+11.4% excluding Genzyme), sustained by Plavix® (up 20.1% to euro 162 million), Lantus® (up 15.1%), Hib vaccine sales and the contribution from Genzyme. Year-to-date sales in Japan reached euro 2,025 million, (up 21.2%, or up 13.1 % excluding Genzyme) of which euro 463 million were generated by Plavix® (up 23.0%) and euro 349 million by Allegra® (up 25.8%).
R&D update
Sanofi submitted five products to regulatory authorities in the U.S. and/or in EU since late July :
Kynamro(TM) (11) (mipomersen), licensed from Isis Pharmaceuticals Inc, in the EU in July for the treatment of patients with homozygous familial hypercholesterolemia (hoFH) and severe heterozygous familial hypercholesterolemia (heFH). The U.S. filing for the hoFH indication is expected in the fourth quarter of this year.
Aubagio(TM) (teriflunomide) in the U.S. in August for the treatment of relapsing multiple sclerosis. The FDA accepted the file for review in October. The filing in the EU is expected in the first quarter of 2012.
Visamerin®/Mulsevo® (semuloparin) in the EU and U.S. in late September for the prevention of Venous Thrombo-Embolism events in cancer patients initiating a chemotherapy regimen.
Lyxumia® (lixisenatide), licensed from Zealand Pharma, in the EU in late October of 2011 for the treatment of type 2 diabetes.
Zaltrap(TM) (aflibercept), from the Regeneron partnership, in the U.S. in October in second line metastatic colorectal cancer. The filing in the EU is expected in the fourth quarter of 2011.
As previously announced, Sanofi also expects to file Lemtrada(TM) (alemtuzumab(12)) in the U.S. and EU in the first quarter of 2012 for relapsing remitting multiple sclerosis. The product has been granted fast track designation by the FDA.
Since the last R&D update on July 28, the portfolio has evolved favorably with the submissions mentioned above, additional positive Phase III data on Lyxumia® (lixisenatide), several compounds entering Phase I or Phase II and one partnership signed in the Vaccines area.
At the beginning of November, the R&D portfolio comprises 66 NMEs (New Molecular Entities) projects and vaccines in clinical development of which 16 are in Phase III or have been submitted to the health authorities for approval.
Evolution of the late stage portfolio:
In September, the Phase III results of GetGoal-F1 trial, one of nine studies in the GetGoal clinical program were announced at the European Association for the Study of Diabetes (EASD). The study objectives were to compare the efficacy and safety of Lyxumia® (lixisenatide), a once-daily GLP-1 receptor agonist, versus placebo in one-step and two-step dose increase regimens in terms of reduction in HbA1c in patients uncontrolled on metformin.
This study achieved its primary efficacy endpoint of significant HbA1c reduction vs. placebo. The results of this study also support simplified treatment initiation of lixisenatide (one-step dose increase regimen).
In parallel, following encouraging Phase IIb results of MOBILITY trial in rheumatoid arthritis, sarilumab (SAR153191), from the partnership with Regeneron, has advanced into the Phase III portion of the MOBILITY trial.
In October, the pivotal Phase III TEMSO study with investigational once-daily oral multiple sclerosis medication teriflunomide (Aubagio(TM)) was published in The New England Journal of Medicine (NEJM). Results showed that teriflunomide significantly reduced the annual relapse rate, reduced disability progression and improved several magnetic resonance imaging (MRI) measures of disease activity, including new or worsening brain lesions. Teriflunomide has a well-characterized safety profile, with a similar proportion of trial participants reporting adverse events compared to placebo.
(11)Zaltrap(TM), Lemtrada(TM), Aubagio(TM), Kynamro(TM) and Lyxumia® are registered trade names submitted to health authorities for investigational agents
(12) Genzyme is developing alemtuzumab in Multiple Sclerosis in collaboration with Bayer HealthCare
In October, results from pivotal phase III clinical trials of Lemtrada(TM) (alemtuzumab) and Aubagio(TM) (teriflunomide) were presented at the Congress of the European and Americas Committees for Treatment and Research in Multiple Sclerosis (ECTRIMS/ACTRIMS):
Lemtrada(TM) (alemtuzumab): New data from the CARE-MS I trial, the first of two randomized, Phase III clinical trials comparing Lemtrada(TM) to Rebif® (high dose subcutaneous interferon beta-1a) in patients with relapsing-remitting MS showed that 78 % of patients treated with Lemtrada(TM) remained relapse-free for two years, providing statistically significant improvement over interferon beta-1a (78 % vs. 59 % at two years, p<0.0001) and meeting this secondary endpoint.
Aubagio(TM) (teriflunomide): New data from the pivotal TEMSO Phase III trial showing that once-daily oral teriflunomide significantly reduced annualized rates of relapses leading to hospitalization. New data also confirmed the safety profile and efficacy of teriflunomide over a six-year period after the initial randomization. New post-hoc analyses showed that teriflunomide-treated patients' annualized rate of relapses leading to hospitalization, the risk of hospitalization, and the annualized rate of emergency medical facility visits were reduced.
Two compounds entered Phase II:
SAR245409/XL765, an oral dual inhibitor of PI3K & mTOR for breast cancer;
SAR302503, a JAK-2 inhibitor for Myelofibrosis and for the treatment of Polycythemia Vera.
Two compounds entered Phase I:
SAR164653, a cathepsine A inhibitor for prevention of cardiovascular complication of Diabetes;
StarGen(TM), in partnership with Oxford BioMedica, a gene-based therapy for the treatment of Stargardt disease
In September, the orphan drug designation status was granted by the FDA to SAR156597, an IL4/IL13 bi-specific monoclonal antibody, for Idiopathic Pulmonary Fibrosis currently in Phase I.
One project in Phase I (SAR 152954 - H3 antagonist evaluated in sleep disorders) has been discontinued.
One research and development collaboration between Sanofi Pasteur and the University of California, San Diego was also signed in September on an immunological approach to acne prevention and treatment targeting the specific neutralization of Propionibacterium acnes factors in inflammation.
Third-quarter financial results
Business Net Income(1)
Sanofi generated third quarter net sales of euro 8,753 million, up 5.0% on a reported basis (up 10.1% at constant exchange rates), reflecting the performance of our growth platforms, the acquisition of Genzyme (euro 768 million), the impact from EU austerity measures, and the loss of euro 471 million of sales due to generic competition. "Other revenues" decreased by 5.4% to euro 419 million, the growth of Plavix® in the U.S. was more than offset by an unfavorable dollar effect. At constant exchange rates, "other revenues" grew by 2.3%.
Gross profit increased 6.7% at constant exchange rates (or 1.2% on a reported basis) to euro 6,417 million. The ratio of cost of sales to net sales increased 2.2 percentage points to 31.5%, reflecting the impact of generic competition (accounted for 1.8 percentage points), a business mix impact from strong vaccines sales as well as exchange rate effect.
Research and development expenses were euro 1,221 million, an increase of 8.7% (or 12.8% at constant exchange rates). Excluding Genzyme, R&D expenses decreased 0.8% at constant exchange rates. The ratio of R&D expenses to net sales was 13.9%, up 0.4 percentage point versus the third quarter of 2010.
Selling and general expenses increased 5.5% (or 10.4% at constant exchange rates) to euro 2,114 million. Excluding Genzyme, SG&A expenses were down 2.0% at constant exchange rates reflecting tight cost control. The ratio of selling and general expenses to net sales was 24.2%, 0.2 percentage points higher than Q3 2010.
Other current operating income net of expenses showed a net income of euro 40 million versus net income of euro 33 million in the third quarter of 2010. This line also includes a slight foreign exchange loss attributable to hedging, compared to a slight gain in Q3 2010.
The share of profits from associates was up 2.7% at constant exchange rates (or down 5.5% on a reported basis) to euro 276 million. The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance was euro 264 million, up 1.9%.
Net income attributable to non-controlling interests was stable at euro 54 million of which euro 51 million was the pre-tax profits paid to BMS from territories managed by Sanofi.
Business operating income was euro 3,344 million, an increase of 2.8% at constant exchange rates (or a decrease of 4.0% on a reported basis). The ratio of business operating income to net sales was 38.2%, 3.6 percentage points lower than in Q3 2010.
Net financial expenses were euro 121 million, compared to euro 127 million and included an impairment of euro 29 million recognized on Greek bonds valued at mark to market. The average cost of gross debt was 2.4% over the quarter.
The effective tax rate was 27.5%, compared to 28.3% in Q3 2010. This decrease reflects a positive effect from countries with lower tax rates.
Business net income(1) was euro 2,398 million, up 4.1% at constant exchange rates or down 3.0% on a reported basis.
In Q3 2011, Business earnings per share(1) (EPS) was euro 1.79, up 1.6% at constant exchange rates, or down 5.3% on a reported basis. The average number of shares outstanding increased to 1,339.4 million this quarter versus 1,304.8 million in Q3 2010 as a result of the dividend payment in shares, net of share repurchases.
(1) See Appendix 8 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi
Year-to-date 2011 financial results
Business Net Income(1)
In the first nine months of 2011, Sanofi generated net sales of euro 24,881 million, up 1.4% on a reported basis and 4.1% at constant exchange rates reflecting the performance of our growth platforms, the consolidation of Genzyme from April 1st, the impact from EU austerity measures, and the loss of euro 1,819 million of sales due to generic competition. "Other revenues" were euro 1,254 million, up 5.9% at constant exchange rates (or up 0.3% on a reported basis).
Gross profit reached euro 18,430 million, stable (up 0.2%) at constant exchange rates, or down 2.8% on a reported basis. The ratio of cost of sales was 30.9%, 3.1 percentage points higher, mainly due to the impact of generic competition.
Research and development expenses reached euro 3,518 million, up 3.8% (or 6.4% at constant exchange rates). Excluding Genzyme, R&D expenses were down 2.6% at constant exchange rates reflecting transforming initiatives. The ratio of R&D expenses to net sales was 14.1%, 0.3 percentage point higher than in the first nine months of 2010.
Selling and general expenses were euro 6,315 million, an increase of 5.8% or 8.7% at constant exchange rates. Excluding Genzyme, SG&A expenses were down 0.2% at constant exchange rates, despite launch costs for Jevtana® in the EU, and Allegra® OTC in the U.S. and greater promotional effort behind Lantus® in the U.S. as well. The ratio of selling and general expenses to net sales was 25.4%, 1.1 percentage points higher than in the first nine months of 2010.
Other current operating income net of expenses was an income of euro 63 million versus an income of euro 135 million in the first nine months of 2010 which included an euro 87 million payment in Q1 2010 received from Teva on sales of Copaxone® in North America (these payments ceased at the end of Q1 2010) and acquisition expenses related to Genzyme (euro 65 million in 2011). This line also includes a slight foreign exchange gain attributable to hedging, compared to a loss in 2010.
The share of profits from associates was euro 846 million, up 8.0% compared to the same period of 2010. The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance were euro 812 million, up 10.6%.
Net income attributable to non-controlling interests was euro 190 million, down 5.9%. The profits paid to BMS from territories managed by Sanofi were euro 176 million, down 3.8%, reflecting competition from clopidogrel generics in Europe.
Business operating income was euro 9,316 million, down 7.3% at constant exchange rates, or down 9.8% on a reported basis. The ratio of business operating income to net sales was 37.4%, 4.7 percentage points lower than in the first nine months of 2010.
Net financial expenses reached euro 299 million versus euro 267 million in the first nine months of 2010. Net financial expenses included in 2010 a capital gain of euro 47 million on the sale of the stake in Novexel and in 2011 an impairment of euro 29 million recognized on Greek bonds valued at mark-to-market.
The effective tax rate was 27.5% in the first nine months of 2011 compared with 28.3% over the same period of 2010.
Business net income(1) reached euro 6,718 million, a decrease of 6.3% at constant exchange rates, or a decrease of 8.9% on a reported basis.
In the first nine months of 2011, Business earnings per share(1) (EPS) was euro 5.09, a decrease of 7.3% at constant exchange rates, or a decrease of 9.9% on a reported basis.
(1) See Appendix 8 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi
From business net income to consolidated net income (see Appendix 6)
In the first nine months of 2011, the main reconciling items between business net income and consolidated net income attributable to equity holders of Sanofi were:
A euro 2,505 million amortization charge against intangible assets arising on the application of purchase accounting to acquired companies (primarily Aventis: euro 1,419 million, Genzyme: euro 476 million and Merial euro 259 million) and to acquired intangible assets (licenses/products: euro 138 million). The third quarter amortization charge against intangible assets was euro 804 million (primarily Aventis: euro 360 million, Genzyme euro 234 million and Merial euro 94 million), euro 44 million of which related to acquired intangible assets (licenses/products). This item has no cash impact on the Group.
An impairment loss against intangible assets of euro 76 million (including euro 7 million in the third quarter related to the termination of a Research collaboration). This item has no cash impact on the Group.
An income of euro 167 million reflecting a decrease in the fair value of contingent considerations related to the CVRs (euro 252 million of which euro 257 million booked in Q3), an increase in the fair value of contingent considerations related to TargeGen business combination (euro 47 million booked in Q1), and Bayer contingent considerations (euro 38 million of which euro 24 million booked in Q3).
A charge of euro 404 million arising from the workdown of inventories of acquired companies (mainly due to Genzyme) remeasured at fair value due to the application of purchase accounting to acquisitions, of which euro 140 million in the third quarter. This item has no cash impact on the Group.
euro 537 million of restructuring costs (including euro 70 million in the third quarter) mainly related to continuing transformation of R&D, Industrial Affairs and Operations in Europe.
A non-recurring amortization charge of euro 517 million booked in Q1 2011 due to the change of plan for Merial assets that were previously classified as held for sale or exchange in accordance with IFRS5. This charge corresponds to the depreciation and amortization of Merial assets that would have been recognized for the period from September 18, 2009 to December 31, 2010, had these assets not been classified as held for sale or exchange. This item has no cash impact on the Group.
A euro 1,429 million tax effect arising from the items listed above, comprising deferred taxes of euro 913 million generated by amortization charged against intangible assets, euro 191 million by the non recurring amortization charge on Merial assets, euro 120 million by the workdown of inventories of acquired companies and euro 174 million linked to restructuring costs. The third quarter tax effect was euro 427 million, including euro 354 million of deferred taxes generated by amortization charged against intangible assets, euro 42 million by the workdown of inventories of acquired companies and euro 24 million linked to restructuring costs (see Appendix 6).
In "Share of profits/losses from associates", a charge of euro 21 million (of which euro 7 million in Q3 2011), net of tax, mainly relating to the share of amortization of intangible assets. This item has no cash impact on the Group.
Net Debt
Over the first nine months of 2011, net cash generated by operating activities after changes in working capital and before restructuring costs was euro 7,688 million, a decrease of 5.1% compared to the first nine months of 2010. This amount provided finance for capital expenditures (euro 1,181 million), the dividend paid by Sanofi (euro 1,372 million), repurchasing of shares (euro 500 million), and restructuring costs (euro 517 million). The acquisitions and partnerships made during the period (euro 14,056 million) were mainly Genzyme (euro 13,528 million) and BMP Sunstone (euro 377 million) and led to an increase of net debt from euro 1,577 million at December 31, 2010 to euro 11,938 million (debt of euro 18,152 million, net of euro 6,214 million cash and cash equivalents) at the end of the third quarter.
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 labeling and other matters that could affect the availability or commercial potential of such products candidates, the absence of guarantee that the products 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 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, 2010. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
Appendices
List of appendices
------------------
Appendix 2011 third-quarter and 9-month consolidated net sales
1: by product
Appendix 2011 third-quarter and 9-month consolidated net sales
2: by geographic region and product
Appendix
3: Consolidated net sales by business segment
Appendix
4: Net sales of Growth Platforms
Appendix 2011 third-quarter and 9-month business net income
5: statement
Appendix Reconciliation of business net income to net income
6: attributable to equity holders of Sanofi
Appendix 2011 third-quarter and 9-month consolidated income
7: statement
Appendix
8: Definitions
Appendix 1: 2011 third-quarter and 9-month consolidated net sales by product
Pharmaceuticals
---------------
Change at
(euro million) Q3 2011 constant Change on a
--------------- ------- ---------- -----------
exchange reported
net sales rates basis
--------- -------- --------
Lantus(R) 968 +14.6% +7.6%
Apidra(R) 53 +22.2% +17.8%
Insuman(R) 32 +6.5% +3.2%
Amaryl(R) 106 -7.4% -12.4%
------- --- ---- -----
Total Diabetes 1,161 +12.4% +5.8%
Lovenox(R) 494 -12.7% -16.1%
Plavix(R) 517 +3.8% +2.4%
Taxotere(R) 186 -64.8% -65.4%
Aprovel(R) 314 -5.6% -6.8%
Eloxatin(R) 310 +179.2% +158.3%
Multaq(R) 66 +52.2% +43.5%
Jevtana(R) 45 - -
-------- --- --- ---
Stilnox(R)/Ambien(R)/Ambien
CR(R)/Myslee(R) 121 -43.6% -44.5%
Allegra(R) 103 -22.8% -24.3%
Copaxone(R) 117 -6.4% -6.4%
Tritace(R) 93 -6.8% -9.7%
Depakine(R) 91 +2.2% -2.2%
Xatral(R) 34 -52.8% -52.8%
Actonel(R) 39 -31.0% -32.8%
Nasacort(R) 14 -64.3% -66.7%
Other Products 1,392 -2.7% -7.8%
Consumer Health Care 665 +20.3% +15.5%
Generics 410 +9.2% +5.1%
-------- --- ---- ----
Genzyme 768 ns ns
------- --- --- ---
Total Pharmaceuticals 6,940 +10.0% +5.2%
--------------------- ----- ----- ----
Vaccines 1,343 +16,7 % +9.5%
-------- ----- ------ ----
Animal Health 470 -5.2% -9.3%
------------- --- ---- ----
Total 8,753 +10.1% +5.0%
----- ----- ----- ----
Vaccines
--------
Change at Change on
(euro million) Q3 2011 constant a
--------------- net sales ---------- ----------
exchange reported
--------- rates basis
--------- --------
Polio/Pertussis/Hib
Vaccines 256 +15.3% +8.5%
Influenza Vaccines* 602 +33.1% +25.4%
Meningitis/Pneumonia
Vaccines 212 +4.9% -3.3%
Adult Booster Vaccines 122 -10.3% -16.4%
Travel and Other Endemics
Vaccines 98 +5.2% +1,0%
Other Vaccines 53 +19.2% +10.8%
-------------- - ----- -----
Total Vaccines 1343 +16.7% +9.5%
-------------- -- ----- ----
*Seasonal and pandemic influenza Vaccines
Animal Health
-------------
Change at
(euro million ) Q3 2011 constant Change on a
--------------- ------- ---------- -----------
exchange reported
net sales rates basis
--------- -------- ---------
Frontline(R) and other
fipronil products 173 -15.3% -19.5%
Vaccines 147 +0% -3.3%
Avermectin 88 +1.1% -3.3%
Other 62 +8.3% +3.3%
Total 470 -5.2% -9.3%
----- --- ---- ----
Pharmaceuticals
---------------
9-month Change at
(euro million) 2011 constant Change on a
-------------- net sales ---------- -----------
exchange reported
--------- rates basis
-------- --------
Lantus(R) 2,862 +14.1% +9.4%
Apidra(R) 155 +24.2% +21.1%
Insuman(R) 96 -1.0% -2.0%
Amaryl(R) 323 -7.6% -9.0%
------- --- ---- ----
Total Diabetes 3,442 +11.8% +7.7%
Lovenox(R) 1,613 -26.1% -27.5%
Plavix(R) 1511 -4.5% -4.2%
Taxotere(R) 772 -54.1% -53.7%
Aprovel(R) 977 -2.1% -2.5%
Eloxatin(R) 746 +182.9% +166.4%
Multaq(R) 197 +88.1% +80.7%
Jevtana(R) 141 - -
-------- --- --- ---
Stilnox(R)/Ambien(R)/Ambien
CR(R)/Myslee(R) 353 -47,0% -46.4%
Allegra(R) 438 -7.9% -3.7%
Copaxone(R) 350 -10.1% -9.6%
Tritace(R) 287 -7.0% -8.6%
Depakine(R) 287 +4.7% +3.6%
Xatral(R) 163 -25.8% -27.6%
Actonel(R) 130 -29.1% -28.6%
Nasacort(R) 88 -37.7% -39.7%
Other Products 4,332 -3.9% -5.2%
Consumer Health Care 2,021 +25.3% +22.9%
Generics 1,258 +14.5% +12.9%
-------- ----- ----- -----
Genzyme* 1564 ns ns
-------- ---- --- ---
Total Pharmaceuticals 20,670 +5.5% +3.0%
--------------------- ------ ---- ----
Vaccines 2,651 -4,7 % -9.2%
-------- ----- ----- ----
Animal Health 1,560 +2.7% +0.3%
------------- ----- ---- ----
Total 24,881 +4.1% +1,4%
----- ------ ---- ----
*Net sales since April 1st 2011
Vaccines
--------
9-month Change at Change on
(euro million) 2011 constant a
-------------- net sales ---------- ----------
exchange reported
--------- rates basis
--------
Polio/Pertussis/Hib
Vaccines 750 +7.8% +4.3%
Influenza Vaccines* 760 -21.0% -24.9%
Meningitis/Pneumonia
Vaccines 395 -4.0% -10.8%
Adult Booster Vaccines 328 +4.2% -1.2%
Travel and Other Endemics
Vaccines 269 -5.5% -7.2%
Other Vaccines 149 +31.8% +22.0%
-------------- - ----- -----
Total Vaccines 2,651 -4.7% -9.2%
-------------- --- ---- ----
*Seasonal and pandemic influenza Vaccines
Animal Health
-------------
9-month Change at
(euro million) 2011 constant Change on a
-------------- net sales ---------- -----------
exchange reported
--------- rates basis
--------- ---------
Frontline(R) and other
fipronil products 632 -1.8% -4.4%
Vaccines 472 +6.4% +4.7%
Avermectin 286 +4.7% +2.5%
Other 170 +7.3% +3.7%
Total 1,560 +2.7% +0.3%
----- ----- ---- ----
Appendix 2: 2011 third-quarter and 9-month consolidated net sales by geographic region and product
Pharmaceuticals
---------------
Q3
2011
net
sales
(euro
million) Western Change United Change Emerging Change Rest of Change
--------- ------- ------ ------ ------ -------- ------ ------- ------
the
Europe at CER States at CER Markets at CER World at CER
------ ------ ------ ------ ------- ------ ------ ------
Lantus(R) 182 +7.1% 580 +14.6% 149 +23.4% 57 +16.3%
Apidra(R) 17 +0.0% 20 +40.0% 11 +10.0% 5 +100.0%
Amaryl(R) 8 -20.0% 1 -50.0% 56 +10.9% 41 -22.2%
Insuman(R) 26 +4.0% 0 7 +16.7% -1
-------- --- ---- --- --- ----- ---
Total
Diabetes 235 +5.9% 601 +15.1% 223 +19.1% 102 -0.9%
Lovenox(R) 199 +8.7% 133 -42.4% 137 + 11.6% 25 +9.5%
Plavix(R) 105 -19.8% 57* +5.5% 176 +12.7% 179 +13.7%
Taxotere(R) 41 -78.4% 27 -85.3% 74 -22.4% 44 -28.6%
Aprovel(R) 180 -10.8% 15* +15.4% 88 +3.3% 31 -6.9%
Eloxatin(R) 7 -36.4% 245 +378.6% 42 +15.8% 16 +6.7%
Multaq(R) 17 +88.9% 46 +45.7% 2 +100.0% 1 -
Jevtana(R) 15 - 26 -31.7% 4 - 0 -
Stilnox(R)/Ambien(R)/Ambien
CR(R)/
Myslee(R) 13 -13.3% 21 -81.0% 17 0.0% 70 +7.7%
Allegra(R) 3 -25.0% -1 -102.7% 26 +20.8% 75 +4.2%
Copaxone(R) 112 -2.6% 0 - 0 -100.0% 5 0.0%
Tritace(R) 42 -6.8% 0 - 44 -4.0% 7 -22.2%
Depakine(R) 36 -2.7% 0 - 53 +7.7% 2 -25.0%
Xatral(R) 14 -12.5% 4 -88.9% 14 -11.8% 2 -66.7%
Actonel(R) 13 -50.0% 0 - 19 -16.7% 7 -20.0%
Nasacort(R) 4 -20.0% 4 -86.2% 5 0.0% 1 -50.0%
--------- --- ----- --- ----- --- --- --- -----
Consumer
Health
Care 152 +2.0% 128 +59.1% 317 +21.3% 68 +4.8%
-------- --- ---- --- ----- --- ----- --- ----
Generics 110 +7.8% 29 +40.9% 264 +9.9% 7 -50.0%
-------- --- ---- --- ----- --- ---- --- -----
Others 568 -9.4% 128 -18.5% 519 +3.1% 177 +4.8%
------ --- ---- --- ----- --- ---- --- ----
Genzyme 192 378 117 81
------- --- --- --- ---
Total
Pharmaceuticals 2,058 -0.4% 1,841 +16.5% 2,141 +14.5% 900 +12.2%
--------------- ----- ---- ----- ----- ----- ----- --- -----
*Sales of active ingredient to the American entity
managed by BMS
Vaccines
--------
Q3
2011
net
sales
(euro
million) Western Change United Change Emerging Change Rest of Change
-------- ------- ------ ------ ------ -------- ------ ------- ------
the
Europe at CER States at CER Markets at CER World at CER
------ ------ ------ ------ ------- ------ ------ ------
Polio/
Pertussis/
Hib
Vaccines 11 -31.3% 111 +4.3% 101 0.0% 33 -1200.0%
Influenza
Vaccines* 78 +20.0% 410 +41.7% 109 +14.3% 5 +33.3%
Meningitis/
Pneumonia
Vaccines 1 0.0% 173 +8.6% 34 -8.1% 4 -16.3%
Adult
Booster
Vaccines 13 -6.7% 98 -7.0% 7 -41.7% 4 -25.0%
Travel
and
Other
Endemics
Vaccines 7 +133.3% 28 +36.4% 55 -8.1% 8 -20.0%
Other
Vaccines 5 +25.0% 40 +22.2% 4 -33.3% 4 +118.6%
-------- --- ----- --- ----- --- ----- --- ------
Total
Vaccines 115 +11.5% 860 +20.5% 310 -0.3% 58 +152.2%
-------- --- ----- --- ----- --- ---- --- ------
*Seasonal and pandemic influenza Vaccines
Animal Health
-------------
Q3
2011
net
sales
(euro
million) Western Change United Change Emerging Change Rest of Change
--------- ------- ------ ------ ------ -------- ------ ------- ------
the
Europe at CER States at CER Markets at CER World at CER
------ ------ ------ ------ ------- ------ ------ ------
Frontline(R)
and
other
fipronil
products 38 -9.3% 100 -19.4% 21 0.0% 14 -20.0%
Vaccines 42 -6.7% 33 -5.3% 67 +6.2% 5 +25.0%
Avermectin 17 13.3% 40 -6.5% 16 -5.6% 15 +25.0%
Other 21 -4.5% 28 +72.2% 10 0.0% 3 -63.6%
----- - ---- - ----- - --- - -----
Total
Animal
Health 118 -4.8% 201 -7.6% 114 +2.6% 37 -14.3%
------ --- ---- --- ---- --- ---- --- -----
Pharmaceuticals
---------------
9-month
2011
net
sales
(euro
million) Western Change United Change Emerging Change Rest of Change
-------- ------- ------ ------ ------ -------- ------ ------- ------
the
Europe at CER States at CER Markets at CER World at CER
------ ------ ------ ------ ------- ------ ------ ------
Lantus(R) 544 +5.9% 1,709 +13.9% 445 +24.3% 164 +20.5%
Apidra(R) 56 +14.3% 53 +21.7% 32 +26.9% 14 +100.0%
Amaryl(R) 25 -21.9% 3 -40,0% 170 +8.4% 125 -21.1%
Insuman(R) 76 -5.0% 0 21 +16.7% -1
-------- --- ---- --- --- ----- ---
Total
Diabetes 707 +4.8% 1765 13.9% 668 +19.6% 302 +0.7%
Lovenox(R) 618 +5.8% 515 -55.1% 411 +12.3% 69 +6.6%
Plavix(R) 324 -36.4% 161* -1.2% 523 +9.7% 503 +16.5%
Taxotere(R) 166 -70.9% 229 -64.0% 230 -23.2% 147 -17.5%
Aprovel(R) 575 -8.5% 38* +26.7% 276 +8.6% 88 +1.3%
Eloxatin(R) 31 -11.8% 546 +535.5% 121 +13.9% 48 +6.7%
Multaq(R) 51 +155.0% 137 +70.9% 5 +400.0% 4 +0.0%
Jevtana(R) 26 - 107 +173.2% 8 - 0
Stilnox(R)/Ambien(R)/Ambien
CR(R)/
Myslee(R) 40 -4.8% 64 -82.5% 48 -5.9% 201 +9.0.%
Allegra(R) 11 -21.4% 4 -97.4% 74 +18.2% 349 +26.3%
Copaxone(R) 334 -7.5% 0 - 0 -100.0% 16 +7.1%
Tritace(R) 130 -9.8% 0 - 139 -1.4% 18 -25.0%
Depakine(R) 108 -2.7% 0 - 169 +11.0% 10 -9.1%
Xatral(R) 45 -11.8% 69 -39.0% 46 -9.6% 3 -25.0%
Actonel(R) 43 -48.1% 0 - 61 -13.9% 26 -13.8%
Nasacort(R) 19 -13.6% 49 -50.5% 17 0.0% 3 -25.0%
--------- --- ----- --- ----- --- --- --- -----
Consumer
Health
Care 495 +3.1% 442 +100.9% 901 +20.1% 183 +6.9%
-------- --- ---- --- ------ --- ----- --- ----
Generics 337 +8.0% 95 +61.9% 801 +15.1% 25 -30.3%
-------- --- ---- --- ----- --- ----- --- -----
Others 1,831 -8.3% 389 -18.5% 1,558 +4.8% 554 +1.9%
------ ----- ---- --- ----- ----- ---- --- ----
Genzyme** 411 757 232 164
--------- --- --- --- ---
Total
Pharmaceuticals 6302 -4.3% 5,367 +5.4% 6,288 +13.6% 2713 +13.7%
--------------- ---- ---- ----- ---- ----- ----- ---- -----
*Sales of active ingredient to the American entity
managed by BMS; ** Net sales since April 1st 2011
Vaccines
--------
9-month
2011
net
sales Change
(euro Western Change United at Emerging Change Rest of Change
million) Europe at States constant Markets at the at
-------- -------- ------ ------- ------ --------- ------ -------- ------
constant
exchange
constant Exchange rates World constant
-------- -------- --------- ----- --------
exchange rates exchange
-------- ----- --------
rates rates
----- -----
Polio/
Pertussis/
Hib
Vaccines 28 -44.0% 320 -0.3% 316 +11.8% 86 +118.4%
Influenza
Vaccines* 78 -31.6% 410 +36.5% 256 -52.8% 16 -17.6%
Meningitis/
Pneumonia
Vaccines 2 -50.0% 303 -5.4% 81 +6.5% 9 -17.1%
Adult
Booster
Vaccines 55 +34.1% 240 +1.6% 19 -29.6% 14 +40.0%
Travel
and
Other
Endemics
Vaccines 18 +20.0% 69 +19.4% 153 -14.8% 29 -12.9%
Other
Vaccines 11 10.0% 116 +35.5% 12 -7.7% 10 +95.2%
--------- --- ---- --- ----- --- ---- --- -----
Total
Vaccines 192 -17.9% 1458 +10.4% 837 -25.4% 164 +40.7%
--------- --- ----- ---- ----- --- ----- --- -----
*Seasonal and pandemic influenza Vaccines
Animal Health
-------------
9-month
2011
net
sales
(euro Change Change Change Rest of Change
million) Western at United at Emerging at the at
-------- ------- ------ ------ ------ -------- ------ -------- ------
Europe constant States Constant Markets constant World constant
------ -------- ------ -------- ------- -------- ----- --------
exchange exchange exchange exchange
-------- -------- -------- --------
rates rates rates rates
----- ----- ----- -----
Frontline(R)
and
other
fipronil
products 176 +2.3% 355 -3.9% 62 +6.8% 39 -12.5%
Vaccines 141 -1.4% 93 +3.1% 227 +15.1% 11 -15.4%
Avermectin 47 +6.8% 146 -1.3% 43 +7.3% 50 +23.7%
Other 64 -4.5% 63 +27.8% 27 0.0% 16 0.0%
----- - ---- - ----- - --- - ---
Total
Animal
Health 428 +0.5% 657 +0.1% 359 +11.4% 116 +1.9%
------ --- ---- --- ---- --- ----- --- ----
Appendix 3: Consolidated net sales by business segment
(Millions of 9-month 9-month
euros) Q3 2011 Q3 2010 2011 2010
------------ ------- ------- -------- -------
Pharmaceuticals 6,940 6,595 20,670 20,071
Vaccines 1,343 1,226 2,651 2,918
-------- ----- ----- ----- -----
Merial 470 518 1,560 1,555
------ --- --- ----- -----
Total 8,753 8,339 24,881 24,544
----- ----- ----- ------ ------
Appendix 4: Net sales of Growth Platforms
(millions Change at 9-month Change at
of euros) Q3 2011 constant 2011 constant
--------- ------- --------- -------- ---------
exchange rates exchange rates
-------------- --------------
Emerging
Markets(1)/(2) 2,565 +12,0% 7,484 +7,3%
Emerging
Markets
excluding
Diabetes,
Vaccines,
CHC, and
new
products 1,478 +4.0% 4,474 +5,5%
Diabetes 1,161 +12.4% 3,442 +11.8%
Vaccines 1,343 +16.7% 2,651 -4.7%
Consumer
Health
Care
(CHC) 665 +20.3% 2,021 +25.3%
Animal
Health 470 -5.2% 1,560 +2.7%
New
products(3) 111 +34.5% 338 +134.0%
------------ --- ----- --- ------
Total
Growth
Platforms 5,228 +10.4% 14,486 +8.2%
---------- ----- ----- ------ ----
(1) World excluding the U.S. and Canada, Western Europe,
Japan, Australia and New Zealand.
(2) Include Diabetes, Vaccines, Consumer Health Care and new
products sales generated in Emerging Markets;
(3) Multaq(R) and Jevtana(R)
Appendix 5: Business net income statement
Third-
quarter
2011 Pharmaceuticals Vaccines Animal health(1) Other Group Total
------- --------------- -------- ---------------- ----- -----------
Millions
of change change change Q3 change
euros Q3 2011 Q3 2010 % Q3 2011 Q3 2010 % Q3 2011 Q3 2010 % Q3 2011 2010 Q3 2011 Q3 2010 %
--------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ------- -- ------- ------- --------
Net
sales 6,940 6,595 5.2% 1,343 1,226 9.5% 470 518 (9.3%) 8,753 8,339 5.0%
Other
revenues 406 429 (5.4%) 8 9 (11.1%) 5 5 419 443 (5.4%)
Cost
of
sales (2,094) (1,843) 13.6% (502) (451) 11.3% (159) (150) 6.0% (2,755) (2,444) 12.7%
As %
of
net
sales (30.2%) (27.9%) (37.4%) (36.8%) (33.9%) (29.0%) (31.5%) (29.3%)
------ ------- ------- ------- ------- ------- ------- ------- -------
Gross
profit 5,252 5,181 1.4% 849 784 8.3% 316 373 (15.3%) 6,417 6,338 1.2%
As %
of
net
sales 75.7% 78.6% 63.2% 63.9% 67.2% 72.0% 73.3% 76.0%
------ ---- ---- ---- ---- ---- ---- ---- ----
Research
and
development
expenses (1,031) (954) 8.1% (154) (131) 17.6% (36) (38) (5.3%) (1,221) (1,123) 8.7%
As %
of
net
sales (14.9%) (14.5%) (11.5%) (10.7%) (7.7%) (7.3%) (13.9%) (13.5%)
Selling
and
general
expenses (1,827) (1,707) 7.0% (140) (144) (2.8%) (147) (153) (3.9%) (2,114) (2,004) 5.5%
As %
of
net
sales (26.3%) (25.9%) (10.4%) (11.7%) (31.2%) (29.5%) (24.2%) (24.0%)
Other
current
operating
income/
expenses (1) 54 2 10 (4) (6) 43 (25) 40 33
Share
of
profit/
loss
of
associates* 269 267 7 25 276 292
Net
income
attributable
to
non-
controlling
interests (55) (53) 1 (1) (54) (54)
------------- --- --- --- --- --- ---
Business
operating
income 2,607 2,788 (6.5%) 564 544 3.7% 130 175 (25.7%) 43 (25) 3,344 3,482 (4.0%)
As %
of
net
sales 37.6% 42.3% 42.0% 44.4% 27.7% 33.8% 38.2% 41.8%
------ ---- ---- ---- ---- ---- ---- ---- ----
Financial
income and
expenses (121) (127)
Income tax
expense (825) (883)
Tax rate** 27.5% 28.3%
---------- ---- ----
Business net
income 2,398 2,472 (3.0%)
As % of net
sales 27.4% 29.6%
----------- ---- ----
Business
earnings per
share*** (in
euros) 1.79 1.89
* Net of tax
** Determined on the basis of Business income before tax, associates, and non-controlling interests
*** Based on an average number of shares outstanding of 1,339.4 million in the third quarter of 2011 and 1,304.8
million in the third quarter of 2010
(1) In 2010: the results of operations of the Merial business previously presented as "held-for-exchange"
were reclassified and included in income from continuing operations in accordance with IFRS5 § 36, following
the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.
Nine
months
2011 Pharmaceuticals Vaccines Animal health(1) Other Group Total
------- --------------- -------- ---------------- ----- ------------
Millions
of change change change change
euros 9M 2011 9M 2010 % 9M 2011 9M 2010 % 9M 2011 9M 2010 % 9M 2011 9M 2010 9M 2011 9M 2010 %
--------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- ------- ------- --------
Net
sales 20,670 20,071 3.0% 2,651 2,918 (9.2%) 1,560 1,555 0.3% 24,881 24,544 1.4%
Other
revenues 1,222 1,215 0.6% 18 21 (14.3%) 14 14 1,254 1,250 0.3%
Cost
of
sales (6,167) (5,374) 14.8% (1,052) (1,003) 4.9% (486) (453) 7.3% (7,705) (6,830) 12.8%
As %
of
net
sales (29.8%) (26.8%) (39.7%) (34.4%) (31.2%) (29.1%) (30.9%) (27.8%)
------ ------- ------- ------- ------- ------- ------- ------- -------
Gross
profit 15,725 15,912 (1.2%) 1,617 1,936 (16.5%) 1,088 1,116 (2.5%) 18,430 18,964 (2.8%)
As %
of
net
sales 76.1% 79.3% 61.0% 66.3% 69.7% 71.8% 74.1% 77.3%
Research
and
development
expenses (2,994) (2,897) 3.3% (418) (378) 10.6% (106) (113) (6.2%) (3,518) (3,388) 3.8%
As %
of
net
sales (14.5%) (14.4%) (15.8%) (13.0%) (6.8%) (7.3%) (14.1%) (13.8%)
Selling
and
general
expenses (5,441) (5,080) 7.1% (404) (428) (5.6%) (469) (459) 2.2% (1) (2) (6,315) (5,969) 5.8%
As %
of
net
sales (26.3%) (25.3%) (15.2%) (14.6%) (30.1%) (29.5%) (25.4%) (24.3%)
Other
current
operating
income/
expenses 41 222 1 8 (11) 32 (95) 63 135
Share
of
profit/
loss
of
associates* 828 758 5 17 13 8 846 783
Net
income
attributable
to
non-
controlling
interests (191) (203) 1 1 (190) (202)
------------- ---- ---- --- --- ---- ----
Business
operating
income 7,968 8,712 (8.5%) 801 1,156 (30.7%) 503 544 (7.5%) 44 (89) 9,316 10,323 (9.8%)
As %
of
net
sales 38.5% 43.4% 30.2% 39.6% 32.2% 35.0% 37.4% 42.1%
------ ---- ---- ---- ---- ---- ---- ---- ----
Financial
income and
expenses (299) (267)
Income tax
expense (2,299) (2,679)
Tax rate** 27.5% 28.3%
---------- ---- ----
Business net
income 6,718 7,377 (8.9%)
As % of net
sales 27.0% 30.1%
----------- ---- ----
Business
earnings
per
share***
(in euros) 5.09 5.65
* Net of tax
** Determined on the basis of Business income before tax, associates, and non-controlling interests
*** Based on an average number of shares outstanding of 1,318.9 million in the first 9 months of 2011 and 1,305.5
million in the first 9 months of 2010
(1) In 2010: the results of operations of the Merial business previously presented as "held-for-exchange" were
reclassified and included in income from continuing operations
in accordance with IFRS5 section 36, following the announcement to maintain Merial and Intervet/Schering-Plough
as two separate organizations
Appendix 6: Reconciliation of Business net income to Net income attributable to equity holders of Sanofi
Q3
Millions of euros Q3 2011 2010(1) % change
----------------- ------- -------- --------
Business net income 2,398 2,472 (3.0%)
------------------- ----- ----- ------
Amortization of intangible assets(2) (804) (879)
Impairment of intangible assets (7) (171)
Fair value remeasurement of contingent 233
consideration liabilities
Expenses arising from the impact of
acquisitions on inventories (140) (2)
Restructuring costs (70) (302)
Other gains and losses, and litigation(3)
Discontinuation of depreciation of PP&E* (IFRS5) 19
Tax effect of : 427 478
Amortization of intangible assets 354 319
Expenses arising on the workdown of
acquired inventories 42
Restructuring costs 24 104
Other items 7 55
Share of items listed above attributable to non-
controlling interests 1
Restructuring costs of associates and
joint ventures, and expenses arising
from the impact of acquisitions on
associates and joint ventures (7) (7)
------------------------------------- --- ---
Net income attributable to equity
holders of sanofi 2,030 1,609 26.2%
--------------------------------- ----- ----- ----
Consolidated earnings per share(4) (in
euros) 1.52 1.23 23.6%
-------------------------------------- ---- ---- ----
(1) the results of operations of the Merial business previously
presented as "held-for-exchange" were reclassified and included
in income from continuing operations in accordance with IFRS5
section 36, following the announcement to maintain Merial and
Intervet/Schering-Plough as two separate organizations.
(2) Of which amortization expense generated by the remeasurement of
intangible assets as part of business combinations: euro 760
million in the third quarter of 2011 and euro 831 million in the
third quarter of 2010.
(3) In 2011: "Catch up" in respect of 2009 and 2010 depreciation and
amortization expense on PP&E* and intangible assets of Merial,
previously classified as "Assets held for sale or exchange" (IFRS5
section 27).
(4) Based on an average number of shares outstanding of 1,339.4
million in the third quarter of 2011 and 1,304.8 in the third
quarter of 2010.
* Property, Plant and Equipment.
- See page 13 for comments on the reconciliation of business net income to consolidated net income
9M
Millions of euros 9M 2011 2010(1) % change
----------------- ------- -------- --------
Business net income 6,718 7,377 (8.9%)
------------------- ----- ----- ------
Amortization of intangible assets(2) (2,505) (2,681)
Impairment of intangible assets (76) (279)
Fair value remeasurement of contingent
consideration liabilities 167
Expenses arising from the impact of
acquisitions on inventories (404) (136)
Restructuring costs (537) (492)
Other gains and losses, and
litigation(3) (517)
Discontinuation of depreciation of PP&E* (IFRS5) 58
Tax effect of : 1,429 1,203
Amortization of intangible assets 913 918
Expenses arising on the workdown of
acquired inventories 120 43
Restructuring costs 174 167
Other items 222 75
Share of items listed above attributable to non-
controlling interests 2
Restructuring costs of associates and
joint ventures, and expenses arising
from the impact of acquisitions on
associates and joint ventures (21) (22)
------------------------------------- --- ---
Net income attributable to equity
holders of sanofi 4,254 5,030 (15.4%)
--------------------------------- ----- ----- -------
Consolidated earnings per share(4) (in
euros) 3.23 3.85 (16.1%)
-------------------------------------- ---- ---- -------
(1) the results of operations of the Merial business previously
presented as "held-for-exchange" were reclassified and included
in income from continuing operations in accordance with IFRS5
section 36, following the announcement to maintain Merial and
Intervet/Schering-Plough as two separate organizations.
(2) Of which amortization expense generated by the remeasurement of
intangible assets as part of business combinations: euro 2,367
million in the first 9 months of 2011 and euro 2,532 million in the
first 9 month of 2010.
(3) In 2011: "Catch up" in respect of 2009 and 2010 depreciation and
amortization expense on PP&E* and intangible assets of Merial,
previously classified as "Assets held for sale or exchange" (IFRS5
section 27).
(4) Based on an average number of shares outstanding of 1,318.9
million in the first 9 months of 2011 and 1,305.5 in the first 9
months of 2010.
* Property, Plant and Equipment.
Appendix 7: Consolidated income statements
Q3 9M
Millions of euros Q3 2011 2010(1) 9M 2011 2010(1)
----------------- ------- -------- ------- --------
Net sales 8,753 8,339 24,881 24,544
----------------- ----- ----- ------ ------
Other revenues 419 443 1,254 1,250
Cost of sales (2,895) (2,433) (8,109) (6,929)
------------- ------ ------ ------ ------
Gross profit 6,277 6,349 18,026 18,865
------------ ----- ----- ------ ------
Research and development
expenses (1,221) (1,120) (3,518) (3,380)
Selling and general expenses (2,114) (2,001) (6,315) (5,956)
Other operating income 90 96 281 339
Other operating expenses (50) (63) (218) (204)
Amortization of intangible
assets (804) (879) (2,505) (2,681)
Impairment of intangible assets (7) (171) (76) (279)
Fair value remeasurement of
contingent consideration
liabilities 233 167
Restructuring costs (70) (302) (537) (492)
Other gains and losses, and litigation (517)
-------------------------------------- ----
Operating income 2,334 1,909 4,788 6,212
---------------- ----- ----- ----- -----
Financial expenses (153) (116) (387) (330)
Financial income 32 (11) 88 63
---------------- --- --- --- ---
Income before tax and associates
and joint ventures 2,213 1,782 4,489 5,945
-------------------------------- ----- ----- ----- -----
Income tax expenses (398) (405) (870) (1,476)
Share of profit/loss of
associates and joint ventures 269 285 825 761
------------------------------ --- --- --- ---
Net income 2,084 1,662 4,444 5,230
---------- ----- ----- ----- -----
Net income attributable to non-
controlling interests 54 53 190 200
------------------------------- --- --- --- ---
Net income attributable to
equity holders of sanofi 2,030 1,609 4,254 5,030
-------------------------- ----- ----- ----- -----
Average number of shares
outstanding (million) 1,339.4 1,304.8 1,318.9 1,305.5
------------------------ ------- ------- ------- -------
Earnings per share (in euros) 1.52 1.23 3.23 3.85
----------------------------- ---- ---- ---- ----
(1) the results of operations of the Merial business previously
presented as "held-for-exchange" were reclassified and included
in income from continuing operations in accordance with IFRS5
section 36, following the announcement to maintain Merial and
Intervet/Schering-Plough as two separate organizations.
Appendix 8: Definitions
Re-presentation of Merial results
In accordance with IFRS 5.36 and as Merial has ceased to be qualified as held for sale or exchange in Q1/2011, the results of Merial classified as held for sale or exchange in previously-issued financial statements have been reclassified and included in income from continuing operations for all periods presented.
Definitions of non-GAAP financial indicators
Net sales at constant exchange rates
When we refer to changes in our net sales "at constant exchange rates", this means that we exclude the effect of changes in exchange rates.
We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.
Reconciliation of reported net sales to net sales at constant exchange rates for the third quarter and the first 9 months of 2011
(millions of euros) Q3 2011 9 months 2011
------------------- ------- -------------
Net sales 8,753 24,881
Effect of exchange rates (426) (670)
Net sales at constant exchange rates 9,179 25,551
------------------------------------ ----- ------
Net sales on a constant structure basis
We eliminate the effect of changes in structure by restating prior-period net sales as follows:
by including sales from the acquired entity or product rights for a portion of the prior period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition;
similarly, by excluding sales in the relevant portion of the prior period when we have sold an entity or rights to a product;
for a change in consolidation method, by recalculating the prior period on the basis of the method used for the current period.
Worldwide presence of Plavix®/Iscover®, Avapro®/Aprovel®
When we refer to the "worldwide presence" of a product, we mean our consolidated net sales of that product, minus sales of the product to our alliance partners plus non-consolidated sales made through our alliances with Bristol-Myers Squibb on Plavix®/Iscover® (clopidogrel bisulfate) and Aprovel®/Avapro®/Karvea® (irbesartan), based on information provided to us by our alliance partner.
Business net income
Sanofi publishes a key non-GAAP indicator in response to the application of IFRS 8. This indicator "Business net income", replaced "adjusted net income excluding selected items".
Business net income is defined as Net income attributable to equity holders of Sanofi excluding:
amortization of intangible assets,
impairment of intangible assets,
fair value remeasurement of contingent consideration liabilities related to business combinations,
other impacts associated with acquisitions (including impacts of acquisitions on associates),
restructuring costs *,
other gains and losses (including gains and losses on disposals of non-current assets*),
costs or provisions associated with litigation *,
tax effects related to the items listed above as well as effects of major tax disputes,
*Reported in the line items Restructuring costs and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.
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SOURCE Sanofi