French drugmaker, Sanofi SA (NASDAQ: SNY) surged around 3% in pre trading session on Friday after the firm reported that It expects greater profits growth this year due to increased demand for its popular medicine Dupixent and flu vaccinations, causing its damaged share price to rebound.
Sanofi now anticipates a 16% increase in adjusted profits per share in 2022, excluding a 9.5% to 10.5% favorable currency effect. It had earlier predicted 15% growth.
It also announced a 26.5% increase in third-quarter business operating income, or adjusted profits before interest and tax, to 4.5 billion euros ($4.5 billion), well ahead of the average analyst forecast of 4.17 billion.
Sanofi shares fell in August after dismal trial results for a once-promising breast cancer therapy candidate, raising fears about the company’s research pipeline, while investors were also concerned about legal accusations that heartburn medication Zantac caused cancer.
The stock has not recovered significantly, and according to Credit Suisse analysts, Sanofi is trading around one-third below its European peers in terms of expected 2023 earnings.
Finance head Jean-Baptiste de Chatillon, who has called the discount “grossly exaggerated,” said on Friday that Sanofi would stick to its plan. “We realize we have certain headwinds, and we are there to combat them and demonstrate to our shareholders that we can produce additional value,” he said during a conference call with journalists.
However, in a further development setback, 1.6 billion euros were deducted off the value of Synthorx’s most advanced medication product, which Sanofi planned to purchase for $2.5 billion in 2019. The cancer treatment would be available later than expected, according to the company.
As a consequence, net income declined 10% to 2.1 billion euros in the third quarter.
Revenue from the exzema and asthma medicine Dupixent, which was developed in collaboration with Regeneron, increased by 44.5% to 2.3 billion euros in the third quarter, much above the analyst forecast of 2.1 billion.
The business is exploring additional expansion for Dupixent in inflammatory skin disorders and smoker’s lung, with trial data due in the first half of 2023.
CFO de Chatillon stated that the firm profited from accelerating seasonal production ramp-up and distribution, but that overall demand for flu vaccines in the United States remained low.
