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UPDATE 1-Sanofi raises outlook after strong Q2 numbers

Mon, 29th Jul 2019 07:18

* Sees EPS growth of 5%, vs earlier 3-5% target

* Surge in Dupixent revenue

* Writedown of Bioverativ deal after weak Eloctate sales

* Shares up more than 2%(Adds share price, comment)

By Matthias Blamont

PARIS, July 29 (Reuters) - Sanofi has raised its2019 outlook on the back of strong second-quarter results, whichbenefited from double-digit growth at the French drugmaker'svaccines and rare diseases businesses.

The company said on Monday it was now aiming for earningsper share growth of around 5% compared to an earlier targetrange of 3-5%.

The positive outlook boosted Sanofi's shares by 2.4% to77.79 euros in early trading.

"Business EPS outlook is raised to the top-end, but suggestsonly minor potential upgrades to consensus, at most, in ourview," wrote Peter Welford, an analyst at brokerage Jefferies.

Sanofi is betting on strong uptake of its drug Dupixent,which is used to treat a number of diseases. Dupixent wasinitially prescribed for atopic dermatitis and later approvedfor asthma and chronic rhinosinusitis.

Sales of Dupixent, developed with U.S firm Regeneron, rose 168% at constant exchange rates in the secondquarter to 496 million euros ($551.80 million).

So far, the medicine has been made available in 28 countriesand 18 launches are to take place by year-end.

Sanofi hopes Dupixent's strong sales prospects and otherdrugs at its rare diseases business Genzyme, along with those ofvaccines and other upcoming products, will continue to offsetweakness of the group's diabetes unit.

Diabetes sales in the second quarter were down 7%, hit againby pricing pressure on its patent-expired Lantus insulin.

WRITEDOWN

Second-quarter net income rose 4.9% at constant exchangerates to 1.64 billion euros while sales were up 3.9% to 8.63billion euros.

Sanofi booked an 1.8 billion euros impairment charge in thequarter related to haemophilia product Eloctate, after lowersales in the U.S. and a revision of sales projections.

Eloctate's revenue fell 11%, a result of direct competitionfrom Roche's Hemlibra, a newcomer in the market.

"It is a non-cash event of course but it is clear that thecompetition from Hemlibra was a surprise to everyone and it isindeed putting pressure," Sanofi chief financial officerJean-Baptiste de Chatillon told reporters.

Eloctate was developed by U.S. haemophilia specialistBioverativ, which Sanofi bought last year for $11.6 billion.

($1 = 0.8988 euros)(Reporting by Matthias Blamont; Editing by Sudip Kar-Gupta andJane Merriman)

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