PARIS: French drugmaker Sanofi pledged more cost cuts to increase margins as it relies ever more on its star eczema treatment to boost earnings, in the face of pressure to come up with a COVID-19 vaccine to tackle the global pandemic.
The drugmaker said on Friday earnings per share would grow further this year after it posted stronger-than-expected fourth quarter results.
Sanofi and Britain’s GlaxoSmithKline stunned investors in December last year by warning a traditional, protein-based COVID-19 vaccine they are developing showed an insufficient immune response in older people, delaying its launch towards the end of 2021.
To appease critics, it said last month it had agreed to fill and pack millions of doses of a Pfizer/BioNTech shot from July.
It is also working on another possible COVID-19 vaccine with U.S. group Translate Bio, with trials set to start this quarter.
Sanofi confirmed an operating income margin target of 30% for 2022 – versus 27.1% in 2020 – and set itself a goal to improve it to more than 32% three years later.
Its eczema drug Dupixent, also prescribed in asthma and nasal polyps, “will become accretive to business operating margin the by end of 2022,” Chief Financial Officer Jean-Baptiste de Chatillon told reporters.
The company, which is cutting just under 1,700 jobs in Europe, raised by a further 500 million euros ($598.10 million) a late 2019 goal to generate 2 billion euros in savings.
Sanofi is hosting a virtual investor day later on Friday that will focus on upcoming drugs as the pandemic affects clinical research across the world.
It has not warned of delays in trials, but awaits pivotal results this year for medications including Fitusiran to treat haemophilia and Libtayo for non-small cell lung cancer, as well as phase II trial results of Venglustat, which could be used to treat genetic disorders.
Sanofi’s fourth quarter earnings per share (eps) rose 9.8% at constant exchange rates to 1.22 euros.
Analysts polled by Refinitiv had expected eps of 1.16 euros and sales of 9.6 billion euros.
Total sales rose 4.2% to 9.4 billion euros after another strong revenue increase of Dupixent and what Sanofi described as “record demand” for its influenza vaccines.
($1 = 0.8363 euros)
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