In what has become a trend among European drugmakers presenting second-quarter earnings this week, the leadership at France’s Sanofi says it has little to be concerned about after a 15% tariff on European pharmaceutical shipments to the U.S. materialized over the weekend.
Still, the interplay between those duties and prospective sectoral tariffs from an ongoing national security investigation remain unclear, with the potential for a significant drug pricing overhaul in the U.S. further complicating efforts to get the lay of the land, Sanofi executives said on an analyst call Thursday.
“It's difficult to comment on what we don't know, but we have run different scenarios,” Sanofi’s finance chief, François-Xavier Roger, said of the situation. “Obviously we have, based on what is widely reported in the media, we have looked at the impact that [tariffs] could have on 2025 given that we are already fairly well advanced in the year, and we confirmed we did not factor it in our guidance.”
Given that Sanofi already has enough U.S. inventory in place for the rest of the year, “we don't think that it will impact our guidance in any way for 2025,” Roger said.
Under a trade deal reached between the U.S. and the EU Sunday, pharmaceutical imports—and those of many other products—coming into the U.S. from the bloc will be subject to a 15% tariff.
But whether those tariffs could be influenced by the Trump administration’s Section 232 investigation into the national security implications of pharmaceutical imports—or compounded by efforts to establish an international drug price reference scheme in the U.S.—remains to be seen, Sanofi’s chief executive, Paul Hudson, admitted on the call.
“Tariffs, once they are established and we know them—an important step—then we’ll know what the relationship is like with the other two components and know whether it’s a 15% tariff with a caveat, or 15-plus or 15-less,” Hudson said. “We don’t know, and nobody knows, but we’re prepared for delivering the guidance this year.”
On pricing, Hudson raised the issue of “innovation access” in Europe, noting, “I think the value of a medicine should be paid for. And there’s a lot of people who could contribute to economies and GDP if medicines were made available to them.”
Hudson continued that he’s “as interested in budgets for healthcare, giving access to innovation for more patients, as they are in the pricing conversation.”
Meanwhile, in a move increasingly being weighed by Big Pharma companies, Sanofi could look to lower the cost of its medicines in the U.S. by cutting out pharma middlemen and selling its drugs directly to patients, Reuters reported Thursday, citing comments made by Roger on a separate media call.
"Direct sales to patients ... That's something that we may consider," he said.
The executives’ comments came as Sanofi delivered a strong quarter of revenue growth but disappointed on profit.
For the three-month period, Sanofi logged total sales of 9.99 billion euros ($11.4 billion), marking an increase of 10.1% at constant currencies over the sum it delivered for the quarter last year.
Meanwhile, Sanofi’s earnings per share (EPS) grew 8.3% at constant currencies to 1.59 euros ($1.82), but that growth was only good for a 1.9% increase on a reported basis. Sanofi’s earnings fell short of expectations for the quarter, due in large part to a more than 17% spending increase on R&D, Reuters noted in its report.
Taking a closer look at Sanofi’s commercial portfolio, new pharma launches grew sales 39% to 0.9 billion euros ($1 billion) for the quarter, with much of the heavy lifting done by the company’s hemophilia A upstart Altuviiio.
Regeneron-partnered Dupixent, the crown jewel of Sanofi’s commercial portfolio, continued to impress with 21.1% sales growth at 3.8 billion euros ($4.3 billion) for the quarter. The antibody’s continued performance was buoyed by the FDA approval it received in chronic obstructive pulmonary disease last September, Hudson said Thursday.
With sales growing strong, Sanofi has narrowed its revenue guidance for the year. The company now expects to achieve high single-digit percentage sales growth for all of 2025, up from a previous range of mid- to high-single-digit growth.
Sanofi also stuck by its previous EPS forecast, which predicts earnings will grow at a “low double-digit percentage” for the year.