Sanofi's Transformation Demands Its Toll: Profit Decline Despite Dupixent Boom

The restructuring measures of the French pharmaceutical company Sanofi have shown initial effects on financial performance. Despite a successful year with the best-selling drug Dupixent, the company had to accept a significant decline in profit. The Sanofi stock experienced a price drop after the latest business results, which particularly fell short of expectations in the fourth quarter, causing disappointment among investors as market analyst Richard Vosser from JPMorgan critically noted. The reforms initiated by CEO Paul Hudson, aimed at a stronger focus on immune diseases, are intended to lay the groundwork for future growth in the medium term. This includes considerable investments in research, which for the time being, however, are at the expense of profits. Additionally, the withdrawal from the profitability target for 2025, announced in October, has not been without consequences for the stock price. As part of the realignment, Sanofi also expects a further decline in profit for the current fiscal year 2024. The company predicts a slight decrease in adjusted earnings due to a rising tax rate. Last year, this indicator already fell by nearly three percent, while real profit dropped by over a third to 5.4 billion euros. In the fourth quarter, Sanofi also suffered a loss of nearly 600 million euros. This can be attributed, among other things, to the costs from the write-off of discontinued research programs and significant restructuring expenses. In addition, the revaluation of license income in the United States had a negative impact in the fourth quarter, specifically regarding the sales of the RSV vaccine Beyfortus. On the positive side, there was a steady turnover of about 43 billion euros last year and revenue growth towards the end of the year, driven by Dupixent and the introduction of the RSV vaccine Beyfortus, which already generated 550 million euros. Moreover, Sanofi announced the upcoming appointment of Francois-Xavier Roger as the new Chief Financial Officer, taking office on the first of April of the current year.