Sanofi’s Diabetes and Cardiovascular Franchise Performance

What Drives Sanofi’s Valuation?

(Continued from Prior Part)

Diabetes and Cardiovascular franchise revenue

Sanofi (SNY) has reorganized its Diabetes and Cardiovascular franchise, making it one of the largest revenue contributors for Sanofi’s Pharmaceutical business. However, the franchise’s revenues fell by ~3.5% at constant exchange rates to ~1.8 billion euros during 1Q16.

Diabetes franchise

Sanofi’s (SNY) Diabetes franchise declined by 4.5% to ~1.7 billion euros, mainly driven by lower sales of Lantus in the US markets and partially offset by the launch of Toujeo in the European markets. Other drugs in this franchise include Amaryl, Apidra, Insuman, Lyxumia, and blood glucose monitoring products.

Lantus, a long-acting human insulin used to treat type 1 and type 2 diabetes, is sold in more than 120 countries and is the largest revenue contributor for this franchise. For 1Q16, Lantus sales totaled ~1.4 billion euros, which is nearly 80% of the company’s total diabetes sales.

Toujeo, a next-generation basal insulin, was launched in the US markets in March 2015. It received EU approval in April 2015 and was subsequently launched in Germany, the Netherlands, and some Nordic countries. It is also approved in Japan, Canada, and Australia. Toujeo is expected to be launched in over 40 countries by the end of 2016.

Sanofi has also launched Insulin Glargine biosimilar, a biosimilar of Lantus, in Europe and Japan. Lantus competes with the drugs like Novo Nordisk’s (NVO) Levemir and AstraZeneca’s (AZN) Byetta. Eli Lilly (LLY) and Boehringer Ingelheim have jointly developed Abasaglar, a biosimilar of Lantus that is already approved in Europe.

Cardiovascular franchise

Sanofi’s (SNY) Cardiovascular franchise includes Praluent and Multaq. Praluent, an injection for lowering LDL cholesterol, was launched in collaboration with Regeneron in July 2015 in the US market, where it reported sales of 9 million euros in 1Q16. Praluent was also launched in the European markets at the end of 2015, reporting sales of 3 million euros in 1Q16.

Multaq, a drug for regulating the heartbeat as a treatment for atrial fibrillation, reported a growth of 2.4% in revenues to 86 million euros in 1Q16.

For broad-based exposure to this industry, investors can consider the VanEck Vectors Pharmaceutical ETF (PPH), which holds 5.4% of its total assets in Sanofi. The PowerShares International Dividend Achievers ETF (PID) holds 1.4% of its total assets in Sanofi.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - A Peek at Sanofi’s Valuation Cheat Sheet

• Part 2 - Sanofi’s Growth Drivers for 1Q16

• Part 3 - Genzyme Continues Driving Growth for Sanofi