Sanofi ADS
SNY · Nasdaq
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $1.02 EPS for Dec 2026 across 4 estimates, ranging $0.87 to $1.20.
SNY Sep 2026
- 25.15%
- $1.63
- $2.04
- —
- —
Highlights
- Growth and beat: Q3 sales were €14.44bn, up 14.3% at constant exchange rates (CER) and 16.2% at actual rates; the supplied reported EPS of $2.04 beat the $1.63 consensus by 25.15%.
- Underlying earnings: Business EPS rose 19.6% at CER to €3.55, versus €2.91 a year ago; business operating income increased 19.7% at CER to €5.43bn, with a 37.4% margin, up 1.7 percentage points.
- Dupixent: Sales grew 34.8% to €5.69bn, driven by demand across indications and geographies; management expects growth to continue in 2027, though the larger comparison base should moderate the rate.
- New medicines: Pharma launches rose 31.4% to €1.39bn, led by products including ALTUVIIIO (€408m, +37.8%), Ayvakit (€203m, +46.0%) and Rezurock (€165m, +43.0%).
- Vaccines weakness: Sales fell 6.6% to €3.19bn, reflecting seasonal delivery phasing for influenza vaccines (-18.8%) and lower Beyfortus sales (-15.4%).
- Margin discipline: Business gross margin expanded 2.1 points to 81.0%; R&D expense was broadly flat at €1.85bn and selling and general expense was €2.31bn, down 0.9% at CER.
- Higher outlook: Sanofi raised 2026 guidance to low-teens sales growth and mid-teens business EPS growth at CER. Management expects business operating income to rise in both amount and margin each year through 2030.
- Strategic moves: Sanofi expanded its Regeneron antibody collaboration with a $1bn upfront payment and up to $7bn in potential milestones; it also agreed to transfer 20 mature medicines and three sites to Cheplapharm for a 26.4% equity stake.
Analysis
Sanofi delivered a strong growth quarter, with sales of €14.44bn up 14.3% at CER and business EPS of €3.55 up 19.6% at CER year over year. The supplied reported EPS of $2.04 exceeded the $1.63 consensus by 25.15%; the release separately reports IFRS EPS of €2.52, up 9.6%. The release emphasizes year-over-year comparisons rather than a sequential Q2 comparison. Growth was supported by Dupixent and newer medicines, while vaccines were a notable offset. A richer product mix and operating leverage lifted the business operating margin to 37.4%, 1.7 points higher at CER than a year earlier, as R&D and selling and general expenses remained broadly controlled relative to sales.
Dupixent sales reached €5.69bn, up 34.8%, and launch medicines grew 31.4%; management expects continued Dupixent demand growth but a slower year-over-year rate in 2027 as the base rises. Vaccines declined 6.6% to €3.19bn, mainly on seasonal phasing and lower Beyfortus sales. Sanofi raised 2026 guidance to low-teens sales growth and mid-teens business EPS growth at CER. Alongside the results, it highlighted portfolio repositioning and post-Dupixent planning: the Regeneron collaboration adds four potential long-acting antibodies, while the Cheplapharm agreement streamlines mature products. Free cash flow was €3.27bn in the quarter and €6.99bn year to date; net debt reached €12.20bn at September 30.
Dupixent and launches
Dupixent remained the central growth engine, with Q3 sales of €5.69bn, up 34.8% at CER. US sales were €4.38bn (+40.2%), Europe €588m (+16.1%) and Rest of World €723m (+22.6%). Management attributed growth chiefly to greater demand across its approved indications, with more than 1.5 million patients on treatment. It expects demand growth to continue in 2027, but year-over-year growth to moderate against the larger base; the recurring Q1 US gross-to-net adjustment is also expected. Management reaffirmed confidence in €25bn of sales by 2030 at constant exchange rates, without raising that target.
- Launch portfolio: Pharma launches generated €1.39bn, up 31.4% at CER. ALTUVIIIO reached €408m (+37.8%), Ayvakit €203m (+46.0%), Sarclisa €196m (+25.8%) and Rezurock €165m (+43.0%).
- Gross-to-net: Management said more than 85% of Q3 sales growth was recurring and demand-driven; a one-off gross-to-net benefit accounted for about 2 percentage points of growth and is not expected to repeat at the same scale.
- Commercial breadth: US sales grew 23.9% at CER to €8.60bn, while Europe was slightly lower (-0.9% to €2.58bn) and Rest of World grew 5.7% to €3.26bn.
Earnings and margins
Business operating income rose 19.7% at CER to €5.43bn, and its margin increased 1.7 points to 37.4%. Business gross profit grew 17.2% at CER to €11.70bn; the 81.0% gross margin was 2.1 points higher, reflecting specialty-care and rare-disease mix as well as some favorable gross-to-net adjustments. Operating leverage was supported by disciplined spending: R&D was €1.85bn, broadly flat at CER, while selling and general expense was €2.31bn, down 0.9% at CER. Higher profit sharing with Regeneron partly offset these gains.
- Business earnings: Business net income increased 17.6% at CER to €4.26bn and business EPS rose 19.6% at CER to €3.55, compared with €2.91 in Q3 2025.
- IFRS results: IFRS net income attributable to Sanofi was €3.02bn, up 7.8%; IFRS EPS was €2.52, up 9.6%. YTD IFRS net income was €4.98bn, down 42.2%, including substantial non-business adjustments such as the €952m amlitelimab impairment booked in Q2.
- Management outlook on costs: Executives said Q4 should also combine strong growth with broadly flat operating expenses. They declined to give 2027 guidance, but expect business operating income and margin to increase each year through 2030.
Vaccines and seasonality
Vaccines were the clearest drag on the quarter: sales fell 6.6% at CER to €3.19bn. Sanofi attributed the decline principally to the expected phasing of respiratory prevention, with a greater share of Northern Hemisphere influenza deliveries expected in Q4 than in the prior year. Beyfortus also weakened, especially in the US, where lower CDC central orders weighed on sales.
- Influenza and COVID-19: Sales declined 18.8% to €1.26bn, reflecting seasonal delivery timing.
- Beyfortus: Sales fell 15.4% to €631m; US sales were €240m, down 39.3%, partly offset by growth in Europe (+1.9%) and Rest of World (+38.2%).
- Offsetting products: Polio/pertussis/hib vaccines, including Heplisav-B, grew 24.9% to €823m, helped by the US contribution from Heplisav-B; meningitis, travel and endemic vaccines rose 4.2% to €476m.
Pipeline and portfolio
Sanofi paired the commercial update with a continuing reshaping of its R&D and business-development priorities. It reported two regulatory approvals, one accepted submission and two regulatory designations during the quarter. Management said capital and external innovation will be concentrated on immunology, rare diseases and vaccines, with other areas subject to partnering, out-licensing or other strategic decisions. Executives also described a more formal technical review process for pipeline decisions and said R&D investment should remain broadly stable next year, with greater emphasis on earlier research and AI.
- Regeneron alliance: The expanded collaboration covers four Regeneron-invented, long-acting antibodies targeting IL-13, IL-4, IL-4 receptor alpha and an IL-4/IL-13 bispecific. Sanofi will pay $1bn upfront, with up to $7bn in potential additional milestones; development and commercial costs and profits are shared 50:50. The existing Dupixent and Kevzara profit-sharing arrangement is unchanged.
- Cheplapharm agreement: Cheplapharm is to take over 20 mature medicines and three manufacturing sites, with Sanofi receiving a 26.4% equity stake. The transfer is planned to begin in Q1 2027 and is subject to approvals and other conditions; Lovenox/Clexane, with 2025 sales of €822m, is included outside the US.
- Milestones: Ayvakit received US approval for a 50mg daily dose option in indolent systemic mastocytosis, and the EU approved MenQuadfi for infants from six weeks. The EU accepted Teizeild for review in younger stage 2 type 1 diabetes patients; Beyfortus received Chinese priority review for a second RSV season and SP0289 received EU PRIME designation.
Cash and capital
Free cash flow was €3.27bn in Q3, up 9.2%, and €6.99bn for the first nine months, compared with €5.45bn in the year-ago period. YTD free cash flow followed €801m of working-capital outflow and €1.51bn of capital expenditure, and included €599m of restructuring payments. Despite cash generation, net debt increased by €1.21bn from the start of 2026 to €12.20bn at September 30. The main uses included the Dynavax acquisition, shareholder distributions and share repurchases.
- Debt movement: Net debt rose from €10.99bn to €12.20bn; the €6.99bn of YTD free cash flow was outweighed by €1.65bn for Dynavax, €4.92bn of dividends, €1.01bn of share buybacks and other outflows.
- Shareholder returns: The approved 2025 dividend was €4.12 per share, continuing 31 consecutive years of dividend increases. Sanofi completed its €1bn share-buyback programme in April 2026.
