• Q4 Net Sales: Increased by 10.3% at constant exchange rates to EUR10.6 billion.
• Full Year Net Sales: Increased by 11.3% at constant exchange rates to EUR41.1 billion.
• Gross Margin: 74.3% in Q4; 75.7% for the full year.
• Business EPS: EUR1.31 in Q4; EUR7.12 for the full year, a 4.1% increase at constant exchange rates.
• Dupixent Sales: Exceeded EUR13 billion, with a 16% growth in Q4.
• Vaccines Sales: Crossed EUR8 billion, up by 13.5% for 2024.
• R&D Expenses: Increased by 14.6% at constant exchange rates to EUR7.4 billion.
• SG&A Expenses: Increased by 4.5%.
• Free Cash Flow: EUR6 billion, impacted by several one-offs.
• Net Debt to EBITDA Ratio: 0.7 times at the end of 2024.
• Proposed Dividend: EUR3.92 per share for 2024.
• Share Buyback Program: EUR5 billion planned for 2025.

• Warning! GuruFocus has detected 8 Warning Sign with DGX.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sanofi SA (NASDAQ:SNY) achieved double-digit sales growth for the third consecutive quarter, driven by new product launches and strong performance from Dupixent.
• Beyfortus reached blockbuster status in its first full year of sales, contributing significantly to the company's growth.
• The company's vaccines business crossed the EUR8 billion milestone, marking a 13.5% increase, driven by Beyfortus and a resilient flu franchise.
• Sanofi SA (NASDAQ:SNY) improved its ranking in the Access to Medicine Index from 8th to 3rd place, highlighting its commitment to global health.
• The company plans to execute a EUR5 billion share buyback program in 2025, reflecting confidence in its future and commitment to shareholder value.

Negative Points

• Gross margin decreased slightly due to the absence of COVID revenues in 2024 and the impact of the Obaggio LOE.
• Business EPS growth was modest at 4.1%, impacted by a lower gross margin and increased R&D expenses.
• The introduction of changes to Medicare Part D under the IRA is expected to create modest headwinds.
• Free cash flow was impacted by price cuts of Lantus in the US, elimination of factoring of receivables, and unfavorable exchange rate impacts.
• The company's net debt increased slightly at the end of 2024 due to strategic investments and dividend payouts.

Q & A Highlights

Q: Can you comment on the rationale for the EUR5 billion share buyback and any plans for the rest of your proceeds? A: The EUR5 billion buyback is intended to mitigate part of the dilution from Opelas. We listened to analysts and shareholders, and EUR5 billion was a consensus amount. The buyback will start soon. We aim to invest in our business, particularly in R&D, AI, and manufacturing, and are also considering external growth opportunities without pressure, focusing on value creation for shareholders. - Francois-Xavier Roger, CFO

Q: Regarding Dupixent, was the Q4 gross-to-net adjustment a one-off, and how will it affect 2025? A: The Q4 net sales reflect some one-off items in the US, including true-ups and fewer business days. This does not affect volume, and we are in a strong position for volume growth. We remain committed to our longer-term guidance. - Brian Foard, Head of Specialty Medicine

Q: What are the catalysts you are most excited about in 2025? A: We are excited about the launch of Dupixent in COPD, the ongoing activity around our bispecific activity in Lunsekimig, and the potential of tolebrutinib in primary progressive MS. These developments are significant for our pipeline and growth. - Houman Ashrafian, EVP, Head of R&D

Q: Can you discuss the potential for Lunsekimig and the implications of its timeline? A: We are confident in Lunsekimig, which combines the potency of TSLP and IL-13. The timeline adjustment aligns with clinicaltrials.org and does not reflect any data changes. We remain committed to its potential in moderate to severe asthma and high-risk asthma. - Houman Ashrafian, EVP, Head of R&D

Q: What is your outlook for the operating margin and potential for margin leverage? A: We expect strong revenue growth and gross margin improvement in the coming years. While R&D expenses depend on future readouts, G&A is expected to be flat to declining. The end of the Regeneron co-development lines may pressure BOI in 2027, but we anticipate growth in absolute value each year. - Francois-Xavier Roger, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.