Sanofi China Q2 Sales Surge by 17.1% Amid '4+7' Policy-Driven Strategic Shift Toward Specialty Care

Sanofi’s Q2 2019 financial results show global sales of €8.628 billion (approximately $9.61 billion), representing a 3.5% year-on-year increase at constant exchange rates (CER). CEO Olivier Brandicourt specifically highlighted that Dupixent (dupilumab), its newly launched drug for dermatitis and asthma, performed best in the U.S. market, while the Vaccines and Specialty Care divisions delivered strong performance across all regions.

As Sanofi’s second-largest market globally outside the United States, China reported second-quarter sales of €709 million ($790 million), a year-on-year increase of 17.1%, representing a slight slowdown from the 22.3% growth rate in the first quarter. Vaccine products and oncology drugs were the primary drivers of performance growth. Notably, Pentaxim (the pentavalent vaccine against diphtheria, tetanus, pertussis, poliomyelitis, and Haemophilus influenzae type b) continued to deliver strong results following the resumption of its supply in the Chinese market. In the second quarter, sales in the Vaccines division’s emerging markets grew by 37.7% to €433 million ($482 million).

Surviving the "4+7" Impact, Transitioning to Specialized Nursing Services

Company executives discussed the impact of the “4+7” volume-based procurement program on the company’s business during the earnings conference call. In the first round of the “4+7” volume-based procurement last year, Sanofi’s two best-selling drugs—the antihypertensive irbesartan and the anticoagulant clopidogrel—lost out to domestically produced generic drugs. During the reporting period, the market performance of these two products remained relatively “stable”: sales of irbesartan and clopidogrel amounted to €75 million (approximately $83.5 million) and €208 million (approximately $231.6 million), respectively. For the remainder of this year, sales of these two drugs in China are expected to decline, with a more pronounced downward trend anticipated after the nationwide implementation of the “4+7” volume-based procurement program in 2020.

The “4+7” volume-based procurement policy’s impact on Sanofi’s existing portfolio of mature products has served as a catalyst for the company’s transition toward specialty care. CEO Mr. Brandicort stated, “Although our mature product and diabetes portfolios have performed well in the Chinese market, contributing to Sanofi’s ranking as the fourth-largest multinational pharmaceutical company in China, our goal is to rebalance the company’s business by accelerating the launch of new products, particularly in the specialty care segment.”

Like other multinational pharmaceutical companies operating in China, Sanofi is also intensifying its efforts in new drug research and development. Six drugs under the company, including Dupixent, a targeted biologic for atopic dermatitis, have been included in the list of urgently needed overseas new drugs by the Center for Drug Evaluation (CDE) of the National Medical Products Administration. These drugs can enter the Chinese market through a fast-track priority channel. Sanofi plans to submit marketing applications for at least 10 products in China by the end of 2020. Additionally, Mr. Brandicort stated that Sanofi will continue to advance its presence in China’s grassroots markets, aiming to ensure stable market share while transitioning toward a portfolio of specialty care products.