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Is Sanofi Pasteur Living Up to Its Name?

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Sanofi Pasteur

Sanofi Pasteur, the Human Vaccines segment of Sanofi (SNY), reported an 8.8% YoY (year-over-year) rise at constant exchange rates in its 2016 revenues at 1.85 billion euros (about $1.98 billion). This increase was mainly driven by polio and hepatitis B vaccines, travel, and other endemic vaccines.

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Polio/Pertussis/Hib vaccines

This franchise includes Pentacel, Pentaxim, and Imovax, among other vaccines. The franchise reported a 12.7% YoY rise in sales at constant exchange rates and reached 1.49 billion euros (about $1.59 billion), due to increased sales of Pentaxim and Hexaxim in the Middle East, Africa, and other emerging markets as well as to Pentacel in US markets.

Influenza vaccines

Influenza vaccines reported a 16.6% YoY rise at constant exchange rates in its 2016 revenues to 1.52 billion euros (about $1.62 billion). This franchise includes Vaxigrip and Fluzone vaccines.

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Meningitis and pneumonia vaccines

Meningitis and pneumonia vaccines including Menactra reported a 4.1% YoY rise at constant exchange rates in its 2016 revenues at 633 million euros (about $676.2 million). Menactra revenues rose ~4.8% YoY to 586 million euros (about $625.97 billion) due to increased growth in US markets.

Other products

Other products include adult booster vaccines, travel, and other endemic vaccines and other vaccines. Adult booster vaccines including Adacel reported revenues of 417 million euros (about $445.3 million) in 2016—a 15.5% YoY fall due to declining Adacel sales in the US.

Travel and other endemic vaccines reported 0.8% YoY decline at 368 million euros (about $392.9 million), while other vaccines reported a 17% YoY decline to 88 million (about $93.9 million) euros in 2016. All these growth rates are at constant exchange rates.

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VaxServe

VaxServe is the US-based entity of Sanofi Pasteur for distribution of vaccines and products from third-party manufacturers. Sales from VaxServe had been reported under the Vaccines segment until December 2015. As of January 1, 2016, VaxServe revenues are now being reported under Other revenues. VaxServe reported sales of 581 million euros (about $620.5 million) during 2016—a 20.5% YoY rise.

Other revenues including VaxServe sales rose ~10.7% YoY to 887 million euros (about $947.2 million) during 2016.

Sanofi Pasteur MSD

Sanofi Pasteur MSD is a joint venture of Sanofi Pasteur with Merck (MRK) in Europe. Sanofi Pasteur MSD sales rose 14.1% YoY on a reported basis at 940 million euros (about $1 billion). But this amount is not consolidated in the above figures.

Notably, to divest risk, investors can consider ETFs like the VanEck Vectors Pharmaceutical ETF (PPH), which has 4.9% of its total assets in Sanofi, 6.8% of its total assets in Pfizer (PFE), 5.2% in Merck (MRK), and 10.3% in Johnson & Johnson (JNJ).

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