On July 28, 2022 Sanofi reported that Q2 2022 sales growth of 8.1% at CER driven by Dupixent, Rare Disease, Vaccines and CHC (Press release, Sanofi, JUL 28, 2022, View Source [SID1234617087])
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•Specialty Care grew 21.6% driven by Dupixent (€1,963 million, +43.4%), and double-digit growth in Rare Disease
•Vaccines up 8.7% due to strong rebound of Travel and Booster vaccines as well as continued PPH franchise growth
•General Medicines achieved 6.0% growth in core assets despite lower COVID-19 related demand for Lovenox
•CHC delivered 5th consecutive quarter of growth (+9.1%) driven by Cough & Cold, Allergy and Digestive Wellness
Q2 2022 business EPS(1) up 16.7% at CER driven by higher sales and improving margins
•BOI margin up 1.3 ppt to 27.2% due to margin improvement from efficiency gains and EUROAPI deconsolidation
•€2.6bn savings achieved at the end of Q2, with the majority reinvested in growth drivers and R&D
•Business EPS(1) of €1.73, up 25.4% on a reported basis and 16.7% at CER
•IFRS EPS of €0.94 (down 2.1%)
Progress on Corporate Social Responsibility strategy
•Sanofi’s Global Health Unit launches a fund for healthcare solutions in underserved regions and Impact, a new brand dedicated for non-profit distribution of 30 Sanofi products to at-risk populations in 40 lower-income countries
•Valyou program continues to improve access through lower out-of-pocket cost of insulins for uninsured patients in the U.S.
•Sanofi upgraded its scope 3 GHG emission reductions ambition to -30% by 2030, unveiling low energy intensity vaccines facility
Key milestone and regulatory achievements on R&D transformation
•Efanesoctocog alfa, the first factor VIII therapy to be granted FDA Breakthrough Therapy Designation for hemophilia A
•Dupixent approved in the U.S as first treatment for adults and children aged 12 and older with eosinophilic esophagitis and as first biologic medicine for children aged 6 months to 5 years with moderate-to-severe atopic dermatitis
•FDA accepted Dupixent for priority review in adults with prurigo nodularis
•Nexviadyme and XenpozymeTM approved in EU
•Next-generation COVID-19 booster demonstrated strong results against variants of concern, including Omicron
Full-year 2022 business EPS guidance revised upward
•Sanofi now expects 2022 business EPS(1) to grow approximately 15%(2) at CER, barring unforeseen major adverse events. Applying average July 2022 exchange rates, the positive currency impact on 2022 business EPS is estimated between +7.5% to +8.5%
Sanofi Chief Executive Officer, Paul Hudson, commented:
"Our performance in the second quarter was again marked by higher sales across our key growth drivers and outstanding financial results leading us to upgrade our business EPS guidance for the full-year. Notably, we saw significant growth momentum from our Specialty Care business, mainly driven by Dupixent. While we continue to increase our investment in R&D, we delivered important pipeline milestones such as the approval of Dupixent in its fourth disease indication, Eosinophilic Esophagitis. Earlier this month, we had the opportunity to showcase at ISTH the transformative potential of efanesoctocog alfa, the first factor replacement therapy for hemophilia A to receive FDA Breakthrough Therapy Designation. We are also making great progress in advancing our fully integrated social impact strategy, notably in Affordable Access with the launch of Impact, a dedicated brand for non-profit distribution to enable the secure distribution of 30 Sanofi medicines in 40 lower-income countries. As we continue to deliver ahead of schedule on our Play to Win strategy, we are confident in our business outlook for the second half and as a result, we are reiterating our commitment to achieving the BOI margin target of 30% in 2022."
2022 second-quarter and first-half Sanofi sales
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Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER1
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In the second quarter of 2022, Sanofi sales were €10,116 million, up 15.7% on a reported basis. Exchange rate movements had a positive effect of 7.6 percentage points, mainly due to the U.S. dollar. At CER, company sales were up 8.1%.
In the first half of 2022, Sanofi sales reached €19,790 million, up 14.2% on a reported basis. Exchange rate movements had a positive effect of 5.8 percentage points. At CER, company sales were up 8.4%.
Second-quarter 2022 operating income
Second-quarter business operating income (BOI) increased 21.5% to €2,753 million. At CER, BOI increased 13.2%. The ratio of BOI to net sales increased 1.3 percentage points to 27.2% (27.1% at CER). In the first half, BOI increased 18.7% to €5,818 million. At CER, BOI increased 12.7%. The ratio of business operating income to net sales increased 1.1 percentage points to 29.4% (29.4% at CER).
Pharmaceuticals
Second-quarter Pharmaceutical sales increased 7.9% to €7,673 million, mainly driven by the Specialty Care portfolio (up 21.6%) with continued strong performance of Dupixent while sales in General Medicines decreased 4.1%. In the first half of 2022, Pharmaceuticals sales increased 7.7% to €14,999 million reflecting the strong performance of Specialty Care and General Medicines core assets.
Specialty Care
Dupixent
In the second quarter, Dupixent (collaboration with Regeneron) sales increased 43.4% to €1,963 million. In the U.S., Dupixent sales of €1,477 million (up 37.9%) were driven by continued strong demand in atopic dermatitis (AD) in adults, adolescents, and children aged 6 to 11 years, and continued uptake in asthma for patients aged 12 years and older and children aged 6 to 11 years, and chronic rhinosinusitis with nasal polyposis (CRSwNP). Dupixent total prescriptions (TRx) increased 38% (year-over-year) and new-to-brand prescriptions (NBRx) grew 23%. In Europe, second-quarter Dupixent sales grew 56.6% to €239 million reflecting continued growth in AD, asthma and CRSwNP. In the Rest of the World region second-quarter sales reached €247 million, up 65.3%. First-half Dupixent sales reached €3,577 million, up 44.4%.
Neurology and Immunology
In the second quarter and the first half, Neurology and Immunology sales grew 1.1% (to €623 million) and 0.7% respectively, driven by strong Kevzara growth which was partially offset by lower Aubagio sales.
Aubagio sales decreased 2.2% in the second quarter to €526 million due to lower sales in the U.S. and in the Rest of the World region as a result of both competitive pressure and price, partially offset by growth in Europe.
Second-quarter Kevzara (collaboration with Regeneron) sales increased 30.4% to €77 million due to a temporary increased global demand for IL-6 receptor blockers.
Rare Disease
In the second quarter, Rare Disease sales increased 11.6% to €891 million driven by growth of the Gaucher, Fabry and Pompe franchises. Sales in the Rest of the World region benefitted from favorable purchasing patterns. First-half sales of Rare Disease increased 6.7% reflecting growth across all three geographic regions and across all core brands.
Second-quarter sales of the Pompe franchise (Myozyme/Lumizyme + Nexviazyme) increased 12.0% to €295 million primarily from new patient accruals across the three regions, favorable purchasing
patterns in the Rest of the World region and the ramp up of Nexviazyme. Myozyme/Lumizyme sales decreased 3.6% to €252 million mainly reflecting the conversion to Nexviazyme in the U.S. Sales of Nexviazyme (which was launched in the U.S. in August 2021 and in Japan in November 2021) were €43 million in the second quarter (of which €37 million in the U.S.).
Sales of the Gaucher franchise (Cerezyme + Cerdelga) increased 16.8% (to €274 million) in the second quarter. Cerezyme sales were up 18.8% to €202 million, driven by the Rest of the World region, reflecting favorable purchasing patterns. In parallel, Cerdelga sales were up 11.5% driven by switches and new patient accruals.
Second-quarter Fabrazyme sales increased 9.3% to €238 million driven mainly by growth in the three geographic regions.
XenpozymeTM (olipudase alfa) was launched in Japan in June as the first and only enzyme replacement therapy for the treatment of non-Central Nervous System (CNS) manifestations of Acid Sphingomyelinase.
Oncology
Second-quarter and first-half sales of Oncology increased 8.0% (to €263 million) and 7.4% respectively, mainly driven by Sarclisa which offset the impact of Jevtana generic competition in Europe.
Second-quarter Jevtana sales decreased 15.8% to €105 million following the entry of generic competition in some European markets (down 73.3%) at the end of March 2021. In the U.S., sales were up 8.2%, where Jevtana is currently covered by four Orange Book listed patents US 7,241,907, US 8,927,592, US 10,583,110 and US 10,716,777. Sanofi filed patent infringement suits under Hatch-Waxman against generic filers asserting the ‘110 patent, the ‘777 patent and the ‘592 patent in the US District Court for the District of Delaware. Sanofi has reached settlement agreements with some of the defendants and the suit against the remaining defendants is ongoing. A 3-day trial has been scheduled starting January 2023 and the remaining defendants have agreed not to launch any generic cabazitaxel product until the earlier of a district court decision in favor of the defendants or four months after the completion of the post-trial briefing. Jevtana also received a regulatory data exclusivity related to the CARD clinical study which expires in December 2023.
Second-quarter Sarclisa sales were €64 million, up 52.5% primarily driven by performance in the U.S. (€30 million, up 62.5%) and Japan.
Sanofi has restructured its immuno-oncology collaboration with Regeneron Pharmaceuticals by granting them the worldwide exclusive license rights of Libtayo, under an amended and restated license and collaboration agreement transferring the rights to develop, commercialize, and manufacture Libtayo. Sanofi will stop consolidating Libtayo non-U.S. sales from the third quarter of 2022.
In the second quarter, Rare Blood Disorders franchise sales increased 5.5% (€336 million), mainly reflecting Alprolix growth partially offset by lower Eloctate sales. First-half franchise sales were up 3.7% driven by Alprolix and Cablivi.
Eloctate sales were €153 million in the second quarter, down 3.5% reflecting lower sales in the U.S. due to competitive environment and in the Rest of the World region.
Second-quarter Alprolix sales were up 16.0% to €129 million driven by the U.S. as well as growth in the Rest of the World region.
Cablivi sales increased by 4.3% to €51 million in the second quarter supported by growth in the U.S. Sales in Europe were stable at €24 million.
Second-quarter sales of Enjaymo, the first approved treatment for patients with cold agglutinin disease (approved in the U.S. in February), were €3 million.
General Medicines
Second-quarter General Medicines sales decreased 4.1% to €3,597 million. Adjusted from portfolio streamlining and excluding EUROAPI2 third party sales (in the second quarter of 2022 and 2021), sales decreased 1.0% driven by sustained core assets performance. Second-quarter Industrial sales were €133 million, down 33.3% and reflected deconsolidation of EUROAPI third party sales from May 10.
First-half sales of General Medicines decreased 2.3% (and decreased 1.6% excluding portfolio streamlining). In the first half, core assets sales accounted for 43.6% of General Medicines sales compared with 40.2% for the same period of 2021.
In the second quarter, core assets3 sales increased 6.0% to €1,611 million, driven by the growth of Praluent and Thymoglobulin and the strong performance of Rezurock, partially offset by lower sales of Lovenox. In the first half, core assets sales increased 5.3% to €3,205 million sustained by double digit growth of Praluent, Thymoglobulin and Soliqua as well as the contribution of Rezurock.
Second-quarter Lovenox sales decreased 10.9% to €337 million, reflecting the high base of comparison in 2021 due to a COVID-19 related demand and increased biosimilar penetration.
Second-quarter Toujeo sales increased 2.4% to €267 million, reflecting growth in the U.S. and Europe partially offset by the anticipated implementation of the Volume Based Procurement (VBP) for insulins in China from May this year.
Sanofi participated in the VBP tender for basal insulin analogues in China in November and was among the bidding winners in Group A with Toujeo and Lantus. In 2022, Sanofi expects its glargine sales to decrease not more than 30% in China, benefiting from higher volumes at significantly lower prices. In China, second-quarter and first-half Toujeo/Lantus sales were €101 million (down 24,2%) and €294 million (down 5,3%), respectively.
Plavix sales were stable in the second quarter at €247 million, reflecting consistent volume growth in China (sales were up 19.1% to €125 million) which offset lower sales in Europe and in Japan where the product was impacted by a mandatory price cut at the beginning of April.
Praluent second-quarter sales were €128 million, up 147.9%. Praluent sales in the U.S. are related to a gross to net true-up, as U.S. sales are now consolidated by Regeneron since the restructuring of the alliance. Excluding the U.S., second-quarter Praluent sales were up 47.9% driven by performance in Europe and an accelerated ramp-up in China with the inclusion in the NDRL effective January 2022.
Multaq second-quarter sales grew 2.5% to €91 million, reflecting growth in the U.S. and in the Rest of the World region.
Second-quarter Soliqua sales increased 4.3% to €53 million driven by growth in the Rest of World region (up 33.3%) which more than offset lower sales in the U.S.
Sales of Rezurock were €43 million in the second quarter. Since launch more than 1000 patients have been treated with Rezurock (25% of current addressable patient population) with excellent persistency rates. Rezurock has a broad formulary coverage in the U.S. with around 80% of lives covered nationally.
In the second quarter, non-core assets sales decreased 8.6% to €1,853 million reflecting portfolio streamlining (-1.9 ppt), and VBP impact in China on Lantus as well as on Eloxatin and Taxotere sales. In the first half, non-core assets sales decreased 6.4% and excluding portfolio streamlining decreased 4.8% (-1.6 ppt).
Lantus sales were €600 million, down 12.1% in the second quarter. In the U.S., sales decreased 19.0%, impacted by the loss of formulary as well as by the overall erosion of the basal insulin market. In Rest of the World region, sales were down 8.2% reflecting the implementation of the insulin VBP in China starting in May this year.
Second-quarter Aprovel/Avapro sales were up 13.1% to €120 million driven by the Rest of the World region recovering from supply constraints last year.
Pharmaceuticals business operating income
In the second quarter, business operating income (BOI) of Pharmaceuticals increased 17.9% to €2,826 million (up 10.4% at CER). The ratio of BOI to net sales increased by 0.7 percentage points to 36.8% (37.0% at CER), reflecting an improvement of the gross margin ratio.
First-half business operating income of Pharmaceuticals increased 15.2% to €5,657 million (up 9.6% at CER). The ratio of BOI to net sales increased by 0.5 percentage points to 37.7% (37.9% at CER).
Second-quarter and first-half Vaccines sales increased 8.7% (to €1,178 million) and 7.8%, respectively, driven by Polio/Pertussis/Hib vaccines sales as well as progressive recovery of Travel and Booster vaccines.
In the second quarter, Polio/Pertussis/Hib (PPH) vaccines sales increased 7.9% to €589 million sustained by Europe and the Rest of the World region which benefitted from strong growth of Pentaxim in China due to market gains and some inventory building. In the U.S., PPH sales were impacted by
growing market share of Vaxelis. As a reminder, Vaxelis in-market sales are not consolidated and the profits are shared equally between Sanofi and Merck.
Second-quarter Meningitis sales decreased 24.7% to €153 million, reflecting U.S CDC inventory fluctuation and lower sales in Latin America.
Booster vaccines sales increased 32.1% in the second quarter to €152 million, driven by progressive recovery in the U.S. and Europe following the COVID-19 pandemic .
Second-quarter Travel and endemic vaccines continued to recover with sales increased 83.8% to €145 million, reflecting growth across all geographies.
Influenza vaccines sales decreased 5.9% to €115 million in the second quarter, reflecting lower sales in the southern hemisphere impacted by unfavorable phasing, partially offset by a reversal of reserve for returns in Europe related to 2021 sales.
Vaccines business operating income
In the second quarter, business operating income (BOI) increased 26.5% (up 14.6% at CER) to €286 million compared to the same period of last year, reflecting strong sales growth despite higher R&D expenses related to Translate Bio and the mRNA center of excellence. BOI to net sales ratio was 24.3% (23.3% at CER) versus 22.1% for the same period of 2021.
In the first half of 2022, BOI of Vaccines decreased 2.5% (down 9.9% at CER) to €582 million reflecting the payment from Daiichi Sankyo recorded in the first quarter of 2021. The ratio of BOI to net sales was 26.5% (25.8% at CER) versus 30.8% in the first half of 2021, 24.7% excluding the payment from Daiichi Sankyo).
In the second quarter, Consumer Healthcare (CHC) sales increased 9.1% to €1,265 million sustained by double digit growth in Europe and Latin America. This performance was due to by the strong demand for Cough & Cold products driven by a strong season, including COVID-19, as well as the growth of the Digestive Wellness, Allergy and Pain Care categories. This global performance includes a positive price effect of 3.5 percentage points (ppt). The divestments of non-core products had a negative impact of 1.4 ppt in the second quarter. First-half CHC sales increased 13.1% due to the strong cough and cold season as well as growth in the Pain care, Digestive Wellness and Allergy categories which more than offset the divestments of non-core products (-1.0 ppt impact).
In the U.S., second-quarter CHC sales increased 3.1% to €335 million driven by double-digit growth of Allergy and single-digit growth of Personal Care categories partially offset by lower sales of Digestive Wellness.
In Europe, second-quarter CHC sales increased 17.9% to €375 million mainly reflecting strong growth of the Cough & Cold, Allergy and Digestive Wellness categories.
In Rest of World, second-quarter CHC sales increased 6.8% to €555 million, supported by growth in all main categories.
CHC business operating income
In the second quarter, business operating income (BOI) of CHC increased 25.5% (up 17.5% at CER) to €423 million. The ratio of BOI to net sales increased 2.5 percentage point to 33.4% (33.3% at CER) versus the prior year reflecting the strong sales growth. In the first half, BOI of CHC increased 39.4% (up 33.9% at CER) to €1,019 million due to strong sales growth and higher capital gains related to divestments of non-strategic assets. The ratio of BOI to net sales increased 6.1 percentage points to 39.3% (39.3% at CER).
Second-quarter and first-half sales in the U.S. increased 12.7% (to €4,078 million) and 12.4%, respectively, supported by the strong performance of specialty care driven by Dupixent.
In Europe second-quarter and first-half sales increased 5.7% (to €2,375 million) and 6.2%, respectively, mainly driven by Dupixent performance as well as strong Vaccines and CHC growth.
In Rest of World second-quarter and first-half sales increased 5.3% (to €3,663 million) and 6.2% respectively, reflecting the performance of Specialty care driven by Dupixent and growth of Vaccines and CHC sales. Sales in China increased 11.2% to €798 million mainly as a result of the growth of Dupixent, Plavix and Vaccines which was partially offset by the impact of VBP. In Japan, second-quarter sales increased 6.6% to €403 million driven by Dupixent and Sarclisa which more than offset lower sales of Plavix. In Russia, after unprecedented stockpiling at pharmacy and patient level in the first quarter, second-quarter sales decreased 14.1% to 156 million. In March, Sanofi has stopped any new spending not related to the supply of its essential and life-changing medicines and vaccines in Russia. This includes all advertising and promotional spending.
R&D update at the end of the second quarter 2022
Regulatory update
•The U.S. Food and Drug Administration (FDA) has approved Dupixent (dupilumab) 300 mg weekly to treat adults and adolescents aged 12 years and older with eosinophilic esophagitis (EoE). With this approval, Dupixent becomes the first and only medicine specifically indicated to treat EoE in the U.S.
•The FDA has approved Dupixent for children aged 6 months to 5 years with moderate-to-severe atopic dermatitis whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable.
•The EC has expanded the marketing authorization for Dupixent in the European Union, for the treatment of children aged 6 to 11 years as an add-on maintenance treatment for severe asthma with type 2 inflammation characterized by raised blood eosinophils and/or raised fractional exhaled nitric oxide (FeNO), who are inadequately controlled with medium to high dose inhaled corticosteroids (ICS) plus another medicinal product for maintenance treatment.
•The FDA has accepted for priority review the supplemental Biologics License Application (sBLA) for Dupixent to treat adults with prurigo nodularis (PN), a chronic inflammatory skin disease that causes extreme itch and skin lesions.
•The EC has approved Xenpozyme (olipudase alfa) as the first and only enzyme replacement therapy for the treatment of non-Central Nervous System (CNS) manifestations of Acid Sphingomyelinase Deficiency (ASMD) in pediatric and adult patients with ASMD type A/B or ASMD type B. Given the urgent unmet medical needs of the ASMD community, the European Medicines Agency (EMA) granted Xenpozyme PRIority MEdicines (PRIME) designation.
•The European Commission has granted marketing authorization for Nexviadyme (avalglucosidase alfa), an enzyme replacement therapy (ERT) for the long-term treatment of both late-onset and infantile-onset Pompe disease, a rare, progressive and debilitating muscle disorder. Nexviadyme is the first and only newly approved medicine for Pompe disease in Europe since 2006, when the European Commission authorized the marketing of alglucosidase alfa, branded Myozyme. As a reminder, in November 2021, the Committee for Medicinal Products for Human Use (CHMP) issued an opinion not to grant New Active Substance (NAS) status to avalglucosidase alfa. In April 2022, the Committee for Orphan Medicinal Product (COMP) also recommended Nexviadyme to be removed from the Community Register of Orphan Medicinal Products (OMP).
Portfolio update
Phase 3:
•The FDA has granted Breakthrough Therapy designation to efanesoctocog alfa (BIVV001) for the treatment of people with hemophilia A, a rare and life-threatening bleeding disorder, based on data from the pivotal XTEND-1 Phase 3 study. Sanofi and Sobi collaborate on the development and commercialization of efanesoctocog alfa.
•Latest results from the IKEMA clinical trial evaluating Sarclisa (isatuximab), for patients with relapsed Multiple Myeloma, in combination with carfilzomib and dexamethasone (Kd), demonstrated a median progression free survival (mPFS) of 35.7 months, compared to 19.2 months in patients treated with Kd alone, as evaluated by an Independent Review Committee.
•Two studies evaluating the effect of venglustat for the treatment of Fabry Disease and Gaucher Disease Type 3 have started and enrolled their first participants.
•Results from a prespecified pooled analysis of nirsevimab pivotal Phase 3 MELODY and Phase 2b trials demonstrated an efficacy (relative risk reduction versus placebo) of 79.5% against medically attended Lower Respiratory Tract Infections (LRTI), caused by Respiratory Syncytial Virus (RSV) in infants born at term or preterm entering their first RSV season.
•In VAT08 Stage 2 trial, positive data from the Sanofi-GSK next-generation vaccine candidate, a bivalent vaccine containing D614 and Beta (B.1.351) strains, demonstrated an efficacy of 64.7% against symptomatic COVID-19 and 72% efficacy in Omicron-confirmed symptomatic cases in an environment of high Omicron variant circulation. In previously seropositive populations, it demonstrated an overall efficacy of 75.1% against symptomatic infection, and 93.2% in Omicron-confirmed symptomatic cases.
•The VAT02 Cohort 2 study of the Sanofi-GSK next-generation COVID-19 booster candidate, a monovalent formulation containing the Beta (B.1.351) variant, induced a significant boost in
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antibody titers above baseline against multiple variants of concern (15-fold increase against D614 parent virus, 30-fold increase against Beta strain, 40-fold increase against BA.1) in adults previously primed with mRNA COVID-19 vaccines.
•In parallel, the independent COVIBOOST (VAT013) study conducted by the Assistance Publique – Hôpitaux de Paris (AP-HP) demonstrated that, following primary vaccination with two doses of Pfizer-BioNTech’s Comirnaty vaccine, the Sanofi-GSK next-generation booster candidate generated a higher immune response than Pfizer-BioNTech’s booster or the Sanofi-GSK first-generation booster. Taken together with VAT08 Stage 2 study, these data strongly indicate the potential of Sanofi-GSK’s next-generation Beta-based booster to be a relevant response to public health needs.
•In May 2022, Sanofi informed investigators participating in the Phase 3 studies of tolebrutinib in multiple sclerosis (MS) and myasthenia gravis (MG) that a limited number of cases of drug-induced liver injury (DILI) had been identified with tolebrutinib exposure in those trials. The events occurred within three months of dosing, were detected with the existing liver monitoring and the majority were determined to have concurrent complications known historically to predispose to drug-induced liver injury. Importantly, the elevations of laboratory values used for monitoring liver injury were reversible after drug discontinuation for all cases. In the same month, study protocols were revised to increase the monitoring frequency, and to exclude patients with preexisting risk factors for hepatic dysfunction from enrolment. In late June, the FDA placed a partial clinical hold on the Phase 3 studies of tolebrutinib in MS and MG. As a result, new enrollment in the U.S. was paused, and participants in the U.S. who had been in the trial for fewer than 60 days had study drug suspended. Meanwhile, more than two-thousand previously enrolled patients around the globe are continuing to receive tolebrutinib treatment. In early July, the FDA provided written notification to Sanofi requesting information pertaining to additional analyses of clinical safety data and some preclinical data. Sanofi is confident in its efforts to provide the Agency with the requested information by end of September. After submission of the response, the FDA can take up to 30 days to render their decision on whether they agree to lift the partial clinical hold, which could occur as early as Q4. In the meantime, enrollment in the clinical program continues with the revised study protocols, including enhanced safety monitoring, in most countries. Close to 190 patients were enrolled since the updated protocols came into effect in May and those patients have shown no signs of liver injury to date. Sanofi expects to finalize the recruitment of the RRMS studies, GEMINI I and GEMINI II, by the end of the year. Sanofi is working closely with the independent data monitoring committee members and investigators around the world to evaluate the effectiveness of these safety measures. Based on tolebrutinib’s strong Ph2b efficacy data and risk mitigation measures, Sanofi remains confident in the future of tolebrutinib as a potentially transformative oral treatment option for people living with MS.
Phase 2:
•The study evaluating SAR445088 for the treatment of Antibody-mediated Rejection has started and enrolled its first participants.
•The study assessing the safety and efficacy of SAR443820 for the treatment of Amyotrophic Lateral Sclerosis has started enrollment.
•Positive results from the Phase 1/2 dose-finding study evaluating the safety, pharmacokinetics and clinical activity of rilzabrutinib in adults with heavily pre-treated Immune Thrombocytopenia (ITP) were published in the New England Journal of Medicine. Results demonstrate treatment with rilzabrutinib led to a rapid and durable increase in platelet count and support an acceptable safety profile.
•The study assessing the efficacy of the investigational miRNA-21 lamidersen (also known as SAR339375), in Alport Syndrome has been discontinued for failure to meet pre-defined futility criteria.
•The development of Dupixent in Peanut Allergy has been discontinued.
Phase 1:
•The study assessing the safety and efficacy of SAR446309 (acquired with Amunix, and formerly known as AMX-818) alone and in combination with pembrolizumab in adult participants with locally advanced or metastatic HER2-expressing cancers has started enrollment.
With the war in Ukraine, Sanofi has adapted its clinical trial implementation in the region. The company decided to halt any new recruitment of patients for ongoing clinical trials in Russia and Belarus, though it will continue to treat patients already enrolled. In Ukraine, Sanofi is doing everything it can to support and supply patients currently enrolled in Sanofi-sponsored clinical trials, including transferring them within Ukraine or into neighboring countries. In anticipation of potential loss of data, Sanofi has activated new clinical sites and expanding patient enrollment in geographies not impacted by the war. This may lead to the planned primary completion dates of pivotal trials in Multiple Sclerosis and Chronic Obstructive Pulmonary Disease (COPD) to shift, previously communicated submission timelines remain unchanged.
Progress on implementation of the Corporate Social Responsibility strategy
Sanofi continues its progress to improve access to medicines
Sanofi’s Global Health Unit announces the establishment of a fund and the launch of Impact
Sanofi Global Health announces the launch of Impact, a new brand of standard of care medicines produced by Sanofi dedicated for nonprofit distribution to at-risk populations in the world’s most impoverished countries. The Impact brand, which includes insulin, glibenclamide and oxaliplatin amonst others, will enable the secure distribution of 30 Sanofi medicines in 40 lower-income countries. Considered essential by the World Health Organization, the medicines cover a wide range of therapeutic areas, including diabetes, cardiovascular disease, tuberculosis, malaria and cancer.
The company also announces the establishment of an Impact fund that will support startup companies and other innovators that can deliver scalable solutions for sustainable healthcare in underserved regions. By providing inclusive businesses financing and technical assistance, the fund will complement the GHU mission of leveraging global, regional and local investment to support the training of healthcare professionals and aiding communities in running sustainable care systems.
Sanofi expands access for underserved communities in the U.S.
Uninsured people living with diabetes in the United States will be able to obtain Sanofi insulins (Lantus, Insulin Glargine U-100, Toujeo, Admelog, and Apidra) from Sanofi’s Insulins Valyou Savings Program with a valid prescription for a fixed price of $35 for a 30-day supply. This is an enhancement to the Insulins Valyou Savings Program. Previously, the program offered a 30-day supply of Sanofi insulins for $99 up to ten boxes of SoloStar pens and/or 10 mL vials or 5 boxes of Max SoloStar pens.
The Insulins Valyou Savings Program has helped thousands of people living with diabetes save on their prescription costs since its launch in 2018. In 2021, the Insulins Valyou Savings Program was used more than 97,000 times and provided more than $37 million in savings to people living with diabetes.
This update is intended to offer more savings to individuals participating in the program.
Sanofi joins Novartis’ Beacon of Hope program to address racial inequities in clinical trials, health and education
Sanofi is proud to announce a collaboration with the Beacon of Hope program to address the root causes of disparities in health and education and to create greater diversity, equity and inclusion across R&D in the pharmaceutical industry.
Racial and ethnic minorities have historically been marginalized in clinical research. Sanofi recognizes and supports the urgency to change this situation and help correct this disparity in clinical trial participation.
Launched in July 2021 as a $33.7 million commitment from Novartis and the Novartis U.S. Foundation, Beacon of Hope began as a 10-year collaboration with Morehouse School of Medicine and 26 other Historically Black Colleges and Universities, the Thurgood Marshall College Fund, Coursera, and the National Medical Association, to work together to increase diversity among clinical trial participants and investigators; improve access to high-quality education and promising jobs; address inherent bias in the data standards used to diagnose and treat disease; and find actionable solutions to environmental and climate issues that disproportionately affect health among communities of color.
Sanofi continues its progress to limit its impact on the environment
CO2 Scope 3 emissions reduction new target
As Sanofi’s ambitious strategy to minimize its environmental impacts including climate change delivers important progress, the company has decided to upgrade its greenhouse gas (GHG) emission reduction target on scope 3, pushing it from -14% initially to -30% by 2030 as part of its carbon neutrality by 2030 ambition.
Last Q3 2021, Sanofi has pledged to achieve carbon neutrality by 2030 across all operations and its entire value chain, as well as net zero greenhouse gas emissions by 2050, bringing the company target date forward by 20 years compared with its previous pledge made in 2015 after COP21 and the Paris Agreement. As part of this ambition, GHG reduction targets vs 2019 baseline were set at -55% by 2030 for operations (Scopes 1 & 2) and at -14% for the value chain (Scope 3). These goals were validated by the Science Based Target initiative (SBTi). Last May Sanofi submitted to SBTi the Net-Zero Target and the upgraded Scope 3 reduction target for validation.
Evolutive Vaccine Facility in Singapore: low energy intensity and 100% electrified by design
Building a path towards carbon neutrality is not only about facilities revamping or optimization but also about designing new factories with the lowest environmental footprint.
Our new vaccine facility in Singapore maximized its energy efficiency including energy recovery in all processes and is 100% electrified and with gas-boiler replaced by heat-pumps and energy recovery in all processes. All available surfaces are equipped with solar panels to generate renewable electricity. The remaining electricity supply will be sourced from renewable alternatives such as long-term power purchase agreements and renewable energy certificates, with the objective to source 100% renewable electricity by 2030, in line with Sanofi RE100 commitment.
ESG dashboard
In 2020, as Sanofi renewed its CSR ambitions, the Company reviewed and updated its portfolio of initiatives. Numbers shown below highlight the ongoing progress in the implementation of Sanofi’s integrated CSR strategy.
Data in YTD unless stated otherwise
Affordable access
Sanofi Global Health, a non-profit unit formed within the company in April 2021, aims to provide 30 of Sanofi’s medicines across a wide range of therapeutic areas to patients in 40 of the lowest income countries. Beyond the products provided, Sanofi Global Health works on integrating programs that ensure optimal care management over time for patients.
Sanofi is also committed to helping 1,000 patients living with rare diseases who have no access to treatments and will donate 100,000 vials of medicine for their treatments each year. This continues Sanofi’s 30-year commitment to patients suffering from rare diseases, such as Fabry, Gaucher or Pompe diseases, for which access to treatment is often limited.
The third initiative on access is to develop a global access plan for all new products, making them available in selected relevant markets within two years of launch.
R&D for unmet needs
Sanofi continues its efforts to fight polio and sleeping sickness, two of its legacy programs that address global health issues.
Sanofi has been involved in the fight against polio from the beginning and continues to play a critical role in the delivery of polio vaccines. The Company has also committed to collaborate with WHO to eliminate sleeping sickness by 2030.
In and beyond the workplace
As a global company, Sanofi is committed to ensuring that its leaders reflect the communities and patients it serves. The Company is committed to continue fostering an organization where all employees have equal opportunities to reach positions of responsibility within the company. Sanofi’s ambition is to have 40% of women in top executive roles and 50% of women in senior leadership roles by 2025. Sanofi is continuing its social and economic engagement in the communities it operates in. Finally, Sanofi is embedding its commitment to society in its leaders’ career development paths to strengthen the social impact of their decisions.
Second-quarter and first-half 2022 financial results
Business Net Income4
In the second quarter of 2022, Sanofi generated net sales of €10,116 million, an increase of 15.7% (up 8.1% at CER). First-half net sales were €19,790 million up 14.2% (up 8.4% at CER).
Second-quarter other revenues increased 108,0% (up 85.0% at CER) to €626 million, including increased VaxServe sales of non-Sanofi products of €393 million (up 53.5 % at CER). In the first half, other revenues increased 68.6% (up 54.7% at CER) to €1,005 million, including VaxServe sales of non-Sanofi products of €679 million (up 35.0% at CER).
Second-quarter Gross Profit increased 21.1% (up 12.2% at CER) to €7,493 million. The gross margin ratio increased 3.3 percentage points to 74.1% versus the same period of 2021, reflecting strong improvement of the Pharmaceuticals gross margin ratio (which increased from 74.9% to 78.5%) driven by favorable product mix and efficiency gains. The Vaccines gross margin ratio increased to 59.3% from 56.5%. CHC gross margin ratio was 66.3%, up 0.3 percentage points. In the first half, the gross margin ratio increased 2.6 percentage point to 74.1% (73.6% at CER) driven by Pharmaceuticals combined with efficiency gains.
Research and Development (R&D) expenses were up 18.8% (up 12,8% at CER) to €1,658 million in the second quarter, reflecting increased expenses in pharmaceuticals priority assets development as well as in Vaccines. In the first half, R&D expenses increased 18.2% to €3,147 million (up 13.4% at CER).
Second-quarter selling general and administrative expenses (SG&A) increased 10.1% to €2,574 million. At CER, SG&A expenses were up 2.8%, reflecting increased commercial investments in Specialty Care growth drivers coupled with a strict control of expenses. In the second quarter, the ratio of SG&A to sales decreased 1.3 percentage points to 25.4% compared to the prior year. In the first half, SG&A expenses increased 9.3% to €4,953 million (up 3.5% at CER) and the ratio of SG&A to sales was 1.1 percentage point lower at 25.0% compared to the same period of 2021.
Second-quarter and first-half operating expenses were €4,232 million, (up 13.4% and 6.6% at CER) and €8,100 million (up 12.6% and 7.2% at CER).
Second-quarter other current operating income net of expenses was €-523 million versus €-198 million in the second quarter of 2021. Other current operating income net of expenses included an expense of €621 million (versus an expense of €307 million in the second quarter of 2021) corresponding to the share of profit to Regeneron of the monoclonal antibodies Alliance, reimbursement of development costs by Regeneron and the reimbursement of commercialization-related expenses incurred by Regeneron. In the second quarter, this line also included €24 million of net capital gains related to General Medicines portfolio streamlining compared to €47 million in the same period of 2021. In the first half of 2022, other current operating income net of expenses was €-788 million versus €-299 million in the same period of 2021 and included €256 million of net capital gains related to portfolio streamlining compared to €103 million in the same period of 2021. The first-half 2022 expense associated with the monoclonal antibodies Alliance with Regeneron was €1,098 million, which compared with €586 million in the same period of 2021 (see appendix 7 for further details).
The second-quarter and first-half share of profit from associates was €25 million and €55 million versus €17 million and €26 million in the same periods of 2021, respectively, and included the share of U.S profit related to VaxelisTM.
Second-quarter business operating income4 (BOI) increased 21.5% to €2,753 million. At CER, BOI increased 13.2%. The ratio of BOI to net sales increased 1.3 percentage points to 27.2% mainly reflecting gross margin ratio improvement. In the first half, business operating income was €5,818 million, up 18.7% (up 12.7% at CER). In the first half, €230 million of savings were generated of which €200 by Industrial Affairs and fully reinvested in key programs in R&D. In the first half, the ratio of business operating income to net sales increased 1.1 percentage points to 29.4% (29.4% at CER).
Net financial expenses were €-77 million and €-155 million in the second quarter and the first half of 2022, respectively, versus €-76 million and €-160 million in the same periods of 2021.
Second-quarter and first-half 2022 effective tax rate was 19.0% versus 21.0% in the prior year. Sanofi expects its effective tax rate to be around 19% in 2022.
Second-quarter business net income4 increased 25.4% to €2,170 million and increased 16.6% at CER. The ratio of business net income to net sales increased 1.7 percentage points to 21.5% versus the second quarter of 2021. In the first half of 2022, business net income increased 22.6% to €4,594 million and increased 16.3% at CER. The ratio of business net income to net sales increased 1.6 percentage points to 23.2% versus the same period of 2021.
In the second quarter of 2022, business earnings per share4 (EPS) was €1.73, up 25.4% on a reported basis (up 16.7% at CER). The average number of shares outstanding was 1,250.8 million versus 1,251.3 million in second quarter of 2021. In the first half of 2022, business earnings per share8 was €3.68, up 22.7% on a reported basis and up 16.3% at CER. The average number of shares outstanding was 1,250.0 million versus 1,250.3 million in the first half of 2021.
Reconciliation of IFRS net income reported to business net income (see Appendix 4)
In the first half of 2022, the IFRS net income was €3,184 million. The main items excluded from the business net income were:
•An amortization charge of €910 million related to fair value remeasurement on intangible assets of acquired companies (primarily Genzyme: €273 million, Bioverativ: €181 million, Boehringer Ingelheim CHC business: €95 million, Ablynx: €84 million and Kadmon: €77 million and to acquired intangible assets (licenses/products: €57 million). These items have no cash impact on the Company.
•An impairment of intangible assets of €87 million.
•Restructuring costs and similar items of €792 million related to streamlining initiatives.
•A €573 million tax effect arising from the items listed above, mainly comprising €218 million of deferred taxes generated by amortization and impairments of intangible assets and €199 million associated with restructuring costs and similar items (see Appendix 4).
EUROAPI spin-off impact on Sanofi IFRS accounts
The line "Other gains and losses, Litigations" includes EUROAPI pre-tax deconsolidation gain of €10 million following distribution in kind of EUROAPI shares on May 10 2022.
At that date, Sanofi lost control ceasing consolidating EUROAPI. Sanofi derecognized 100% of EUROAPI net book value assets €1 227 million including goodwill. Other impacts are:
•an equity reduction of an amount of €793 million corresponding to the fair value of the distribution in kind measured at the EUROAPI market share price observed on Euronext at that date,
•the cash-in on June 17, 2022 from the 12% of the share capital of EUROAPI acquired by the French State, through its French Tech Sovereignty fund, EPIC BPIFrance, for a amount of €150 million,
•the retained interest in EUROAPI measured at fair value for an amount of €413 million.
The "Tax income" line includes €102 million gain following EUROAPI transaction.
Capital Allocation
In the first half of 2022, free cash flow before restructuring, acquisitions and disposals decreased by 17.6% to €3,735 million, after net changes in working capital (€-710 million) and capital expenditures (€-696 million). After acquisitions5 (€-419 million), proceeds from disposals5 (€541 million) and payments related to restructuring and similar items (-€615 million), free cash flow6 decreased 3.3% to €3,242 million. After the acquisition of Amunix (-€875 million), the dividend paid by Sanofi (-€4,168 million), net debt increased from €9,983 million at December 31, 2021 to €12,190 million at June 30, 2022 (amount net of €6,899 million cash and cash equivalents).