2 November 2020 - Deborah Wilkes
Sanofi's Consumer Healthcare business reported worldwide sales down by 1.1% in the third quarter of 2020, as the voluntary recall of Zantac in the US and Canada in October 2019 continued to have an impact.
Excluding the impact of the Zantac recall, Sanofi Consumer Healthcare’s sales increased by 0.1% in the quarter.
Julie Van Ongevalle – executive vice-president, Consumer Healthcare – said the business had seen “good momentum in most of its categories in the third quarter”.
Sanofi noted that the performance of the business reflected “lower in-person pharmacy traffic due to the COVID-19 pandemic in the Rest of the World region” and “lower demand for cough and cold products outside the US”.
Sales had also been impacted by “divestments of non-core products and product suspensions due to changing regulatory requirements”, added Sanofi.
Looking ahead to the fourth quarter, Jean-Baptiste de Chatillon, Sanofi’s chief financial officer, said “in-person pharmacy traffic was expected to be subdued” but the “Zantac voluntary withdrawal would annualise”.
Performance in third quarter
Worldwide sales at Sanofi Consumer Healthcare reached EUR1.04 billion (USD1.22 billion) in the third quarter of 2020, representing a fall of 1.1% at constant exchange rates compared to the same period a year earlier. As reported, sales were down by 8.3%.
In the first nine months of the year, sales were down by 1.5% at constant exchange rates to EUR3.37 billion. Excluding Zantac, sales were up by 1.1%.
The decline in the third quarter was strongest in the largest region, the Rest of the World, where sales decreased by 2.8% at constant exchange rates to EUR467 million (see Figure 1 below).
Sanofi said “lower in-person pharmacy traffic, especially in Japan, as a result of the COVID-19 pandemic had offset the strong performance in China”.
Sales in Europe were down by 1.5% at constant exchange rates to EUR324 million. Sanofi said the fall reflected “lower demand for cough and cold products”.
By contrast, sales in the US were up by 2.7% at constant exchange rates to EUR250 million. Sanofi said growth in the sales of its allergy products had largely offset the impact of the Zantac recall.
Development of categories
Pain was the largest category for Sanofi Consumer Healthcare in the third quarter of 2020, with sales up by 5.0% at constant exchange rates to EUR291 million (see Figure 2 below). Sales of Doliprane rose by 2.7% to EUR75 million.
Allergy, Cough & Cold was the second-largest category for Sanofi Consumer Healthcare, but sales were down by 13.4% at constant exchange rates to EUR236 million.
Looking at allergy remedies, Allegra recorded sales down by 5.4% to EUR83 million, but sales of Xyzal were up by 41.7% to EUR16 million.
Digestive was the third-largest category, with sales up by 0.4% to EUR211 million despite the Zantac recall.
Sales of Nutritionals were up by 4.2% to EUR159 million.
Operating income down by 16%
Consumer Healthcare's operating income dropped by 16.0% as reported to EUR325 million, representing 31.2% of sales.
Expenditure on research and development during the quarter was unchanged at EUR33 million, representing 3.2% of sales.
Consumer Healthcare accounted for 11.0% of Sanofi’s total worldwide sales in the third quarter of 2020, which were up by 5.7% at constant exchange rates to EUR9.48 billion. As reported, sales were down by 0.2%.