Fitusiran

The negative reaction to the impending departure of Sanofi CEO Paul Hudson, and Merck KGaA leader Belén Garijo as his replacement, is perhaps surprising given the French company’s muted performance under Hudson’s leadership. Sanofi’s shares fell about 3% in Paris and 4% in New York, a cold shoulder that may simply reflect the scale of the challenge that Garijo faces when she takes the reins in late April. She’ll have less than five years before the company’s immunological juggernaut Dupixent goes generic. Investors are concerned Garijo doesn’t have a track record of delivering R&D productivity at Merck KGaA, Jefferies managing director Michael Leuchten told Endpoints News in an interview. He considers that criticism “a little unfair” because the German conglomerate focused its capital allocation on areas other than pharma. “We thought the negative reaction on share price was harsh and kind of misses some of the nuances of what may be going on here,” Leuchten said. The company’s shares have lost about a quarter of their value in the past year. Garijo and her team will have to find pragmatic ways to extend Dupixent’s exclusivity, which could be possible through patent settlements and building on its joint venture with Regeneron, because there isn’t time to “rebuild an R&D organization from scratch” before Dupixent’s patent expires, Leuchten said. “One scenario that I think is possible is for Sanofi to go and acquire some assets that they fully fund and put those assets into the joint venture,” Leuchten said. Sanofi’s strategic priorities will remain unchanged under Garijo, a company spokesperson told Endpoints in an email. At Merck KGaA, Garijo’s history of dealmaking wasn’t scintillating. The biggest deal the company closed under her leadership was the $3.9 billion SpringWorks acquisition , and the rare cancer drugs Merck KGaA obtained haven’t been particularly lucrative so far. Another aspect driving some of the skepticism is that Garijo has had trouble delivering on promises in the past. In a letter in early 2022, she set out a goal for Merck KGaA known as “25 by 25” — achieving €25 billion ($27 billion) in total sales by 2025. The group won’t report its 2025 earnings until next month, but last October it guided to 2025 net sales between €20.8 billion and €21.4 billion. This missed goal is undeniably partly due to pipeline misfires. The failure of Merck KGaA’s evobrutinib in multiple sclerosis in late 2023 was followed by the cancellation of the pivotal trial of the head and neck cancer drug xevinapant in June 2024, after an interim analysis concluded the study was headed for failure. But Sanofi’s efforts to improve its drug development under Hudson didn’t always go as planned either. In 2019, at the beginning of his tenure as CEO, Hudson highlighted six programs as priorities. Two made it to market, Qfitlia (for hemophilia) and Beyfortus (for respiratory syncytial virus), but the others have either disappointed or failed entirely. Hudson also stopped developing a GLP-1 program for diabetes called efpeglenatide, just as other drugmakers were stepping up development efforts of this mechanism in obesity. There is no guarantee that asset would have gone on to do well, but the decision looks poor in retrospect. Sanofi’s current strategy involves going big on vaccines and investing in deals with a budget of up to €15 billion to spend across four key therapeutic areas: immunology, vaccines, neurology and rare diseases. This seems unlikely to compensate for Dupixent’s loss of exclusivity, since the drug accounted for 36% of Sanofi’s 2025 revenues. It was perhaps Sanofi’s eagerness on immunology that led things to go wrong at the French drugmaker under Hudson in the first place, Leuchten said. Sanofi assumed that immunology can be approached rationally and with acceptable risk, but time has shown that the space is “a lot more complicated than we thought,” Leuchten said. “The placebo response rates are all over the shop, you get intratrial variability, so the rational approach doesn’t work as well as anybody thought.” Sanofi’s change at the top seems to have happened fast; CEO transitions can be planned around a year in advance in the normal run of things. But Sanofi has ousted leaders with unceremonious haste before. In 2014 it sacked then-CEO Chris Viehbacher after a boardroom clash over Viehbacher’s management style.

2025: strong sales and EPS growth.Continued profitable growth expected in 2026 Paris, January 29, 2026 Q4 sales growth of 13.3% at CER1 and business earnings per share (EPS)2 of €1.53 Pharma launches increased sales by 49.4%, reaching €1.1 billion, primarily driven by Ayvakit and ALTUVIIIODupixent sales increased by 32.2% to €4.2 billion, a strong end to the yearVaccines sales decreased by 2.5% to €2.0 billion, with influenza performing better than anticipatedResearch and Development expenses reached €2.3 billion, up by 6.6%Selling, general and administrative expenses reached €2.7 billion, up by 9.6%, supporting launchesBusiness EPS was €1.53, up by 26.7% at CER; 16.8% at actual exchange rates, delivering profitable growth; IFRS EPS -€0.66 Pipeline progress Ten regulatory approvals across immunology, rare diseases, and otherPositive phase 3 readouts: amlitelimab program in AD (COAST 2, SHORE) and Dupixent in AFRSTolebrutinib in PPMS did not meet the primary endpointFour regulatory submission acceptances, five phase 3 study starts, three regulatory designations (orphan, priority reviews) Capital allocation Announcement of the Dynavax acquisition3 and completion of the Vicebio acquisitionCompletion of the €5 billion share buyback programProposed dividend of €4.12; up by 5.1% Other major developments Sanofi reached agreement with the US government to lower medicine costs while strengthening innovationSanofi leads an industry working group on biopharma life cycle assessment Guidance In 2026, sales are expected to grow by a high single-digit percentage at CER. Business EPS at CER is expected to grow slightly faster than sales (before share buyback), delivering profitable growth.4 Sanofi intends to execute a share buyback program in 2026 of €1 billion. Paul Hudson, Chief Executive Officer: “In the fourth quarter, sales growth accelerated to 13.3%, delivering another strong performance. Growth was supported by new medicines and Dupixent, reaching a new quarterly high. Business EPS was up by 26.7% with the benefit of cost discipline and growth leverage. We obtained ten regulatory approvals across immunology, rare diseases, and other, and had several positive phase 3 readouts. In 2025, we achieved a strong year of profitable growth. Sales increased by 9.9% at constant exchange rates, while business EPS improved significantly faster by 15.0%. We launched three new medicines and vaccines: Qfitlia, Wayrilz, and Nuvaxovid, providing innovative options to patients with rare diseases and COVID-19 prevention. All this was made possible by the dedicated effort of all Sanofi colleagues worldwide. In 2026, we expect sales to grow by a high single-digit percentage and business EPS to grow slightly faster than sales. We anticipate profitable growth to continue over at least five years.” Q4 2025ChangeChange at CERFY 2025ChangeChange at CERNet sales €11,303m +7.0% +13.3% €43,626m +6.2% +9.9%IFRS net income€(801)m -260.5% — €7,813m +40.5% — IFRS EPS€(0.66) -265.0% — €6.40 +44.1% — Free cash flow5 €2,637m +12.7% — €8,089m +35.8% — Business operating income €2,341m +12.7% +21.7 % €12,149m +7.1% +11.9%Business net income €1,856m +13.0% +22.3 % €9,555m +7.2% +12.1%Business EPS €1.53 +16.8% +26.7% €7.83 +10.0% +15.0% 1 Changes in net sales are at constant exchange rates (CER) unless stated otherwise (definition in Appendix 9).2 To facilitate an understanding of operational performance, Sanofi comments on the business net income, a non-IFRS financial measure (definition in Appendix 9). The income statement is in Appendix 3 and a reconciliation of IFRS net income to business net income is in Appendix 4.3 The acquisition of Dynavax is currently pending; it is expected to close in Q1 2026 subject to the satisfaction of customary closing conditions.4 Applying January 2026 average currency exchange rates, the currency impacts are estimated at c.-2% on sales and at c.-3% on business EPS.5 Free cash flow is a non-IFRS financial measure (definition in Appendix 9). Attachment Press release