Sanofi stock crashed Friday after the drugmaker missed Wall Street's third-quarter expectations and announced a plan to spin off its consumer health division.
On the stock market opened, Sanofi stock plummeted 19.1% to 43.13 in huge volume. That put shares at their lowest point since last November as they undercut their 200-day line, according to MarketSmith.com.
In addition to lagging third-quarter metrics, Sanofi issued "disappointing guidance for 2024 and 2025," Leerink Partners analyst David Risinger said in a report. In 2024, a higher tax rate will prompt earnings to slide by a low single-digit percentage he said. The company expects earnings to rebound in 2025.
France-based Sanofi reiterated its plans to deliver more than 22 billion euros in sales from its immunology drugs by 2030. The company also expects its vaccines to generate at least 10 billion euros that year. That comes out to a combined $33.73 billion, based on today's exchange rates.
Sanofi Stock Crashes On Earnings Miss
But Sanofi stock took a hit on its light third quarter. During the three months ended Sept. 30, Sanofi earned 2.55 euros per share, or about $2.69. Earnings tumbled 11.5% year over year and were 2% below expectations, Risinger said.
Sales slipped 4.1% to 11.96 billion euros, or about $12.33 billion. Analysts expected a stronger 12.48 billion euros, according to FactSet.
Risinger says revenue from Sanofi's consumer health and vaccine segments came in light. Flu shot sales skidded more than 6% in constant currency to 1.77 billion euros, about $1.86 billion. Sanofi stock analysts were looking for a bigger 1.82 billion euros.
But sales from Regeneron Pharmaceuticals-partnered eczema and asthma drug Dupixent beat forecasts. Dupixent brought in 2.85 billion euros in sales, or about $3 billion, up 32.8% excluding the impact of exchange rates. That easily beat analysts' forecast for 2.83 billion euros.
For the year, Sanofi reiterated its expectations for earnings to grow by a mid-single-digit percentage. But, accounting for exchange rates, earnings will fall 6% to 7%, the company said.
In constant currency, Sanofi expects its full-year guidance to grow by a mid-single-digit percentage. Accounting for exchange rates, earnings will fall 6% to 7%, the company said.
Sanofi also announced its plan to spin off its consumer health business "at the earliest" opportunity in the fourth quarter. It will create a publicly listed company headquartered in France.
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