PARIS (Reuters) - Sanofi (SASY.PA) raised its 2020 earnings forecast on Wednesday after its second-quarter results were boosted by cost cuts and the sale of most of its 20.6% stake in U.S. company Regeneron (REGN.O), although revenue was hit by the coronavirus crisis.
The French drugmaker said it was now targeting earnings per share growth of 6-7% this year, up from 5%, in a sign of confidence in its new strategy as well as star eczema treatment Dupixent. Its shares were up 0.7% in early trading.
The company also said it had struck a deal to supply up to 60 million doses of a potential COVID-19 vaccine being developed with GlaxoSmithKline (GSK) (GSK.L) to Britain.
Sanofi is working on two of the more than 150 potential vaccines being developed across the world to tackle the COVID-19 pandemic, which has claimed more than 659,000 lives and sparked economic havoc.
Neither the GSK project, nor the other with U.S. group Translate Bio (TBIO.O), is among the most advanced, with clinical trials not expected to start until September.
But most vaccines fail in development stages, and Sanofi believes its experience with flu vaccines could be an advantage.
Sanofi announced a new strategy in December, and is shifting from a generalist pharmaceutical company to a leaner business centred around vaccines, rare diseases and oncology.
The company has ended diabetes and cardiovascular research and is boosting its internal pipeline of drugs, aiming to make savings and deliver a strong increase in profits by 2022.
Second-quarter net income was up 5.6% at constant exchange rates to 1.6 billion euros (1.45 billion pounds). Sanofi achieved 990 million euros of cost cuts in the first half and made $11.7 billion in May from selling shares in Regeneron. The money is expected to be spent on innovation and bolt-on acquisitions.
Revenue, however, was down 3.4% in the quarter at 8.2 billion euros. Sales of vaccines were down 6.8% as coronavirus lockdowns hit international travel.
Analysts polled by Refinitiv had been expected net income of 1.53 billion euros and sales of 8.5 billion euros.
Sales at Sanofi’s consumer healthcare business also fell - down 8% after a jump in the first quarter when buyers stocked up on painkillers as the pandemic took hold.
Reporting by Matthias Blamont; Editing by Sherry Jacob-Phillips and Mark Potter