Episode Details

Sanofi (SNY) Q2 2026 — Reported before the European open on July 30 (quarter ended June 30, 2026). Q2 net sales EUR 11,597M, +17.8% at constant exchange rates and +16.0% reported. Business EPS EUR 2.09 per ORDINARY share, +33.3% CER. Business operating income EUR 3,291M at a 28.4% margin, up 380bps. Q2 free cash flow EUR 2,670M, +86.8%. And FY2026 guidance was RAISED to around +10% sales growth at CER. But IFRS net income fell 91.3% to EUR 343M, and Sanofi discontinued THREE development programmes in the same release. SNY closed down 4.4% at $42.89 on the day, then $43.08 on July 31 — 17.7% below the November high. Sanofi reports in EUROS per ORDINARY share, and 1 ordinary share = 2 SNY ADSs. So the EUR 2.09 business EPS everyone quoted is about $1.22 per ADS at Sanofi's own 1.163 EUR/USD rate. On consensus FY2026 business EPS of EUR 8.54 per ordinary share, SNY trades at roughly 8.7x — the cheapest large-cap pharma on earth — while paying a ~5.6% dividend. The catch: Dupixent is 44.4% of ALL sales, roughly half its profit belongs to Regeneron, and the pipeline meant to replace it lost three programmes in one quarter. THE CALL: BUY (4/5, PAID TO WAIT ON A REAL PIPELINE PROBLEM) — base-case value ~$55.0 vs ~$43.08 today. KEY METRICS: - CALL: BUY 4/5 — fair value ~$55 per ADS vs $43.08 (+27.7%). STREET (S&P Global, 10 analysts): consensus Buy, average target $54.61, median $54.50, range $45-$63. We ALIGN almost to the dollar — but for a different reason. Their case is the pipeline; ours is that at 8.7x you are not paying for the pipeline at all. - ADR BASIS (this is where most coverage goes wrong): 1 Sanofi ordinary share = 2 SNY ADSs. Sanofi reports EPS, dividends and share counts per ORDINARY share, in EUR. Q2 business EPS EUR 2.09/ordinary = EUR 1.045/ADS = ~$1.22 at Sanofi's own Q2 average rate of 1.163. FY2025 dividend EUR 4.12/ordinary = ~$2.40/ADS = a 5.6% yield. 1,196.6M ordinary shares = ~2,393M ADSs = ~$103B market cap. - THE PRINT: Q2 net sales EUR 11,597M (+17.8% CER, +16.0% reported, FX -1.8pp). US EUR 6,344M +33.5%; Europe EUR 2,141M +1.3%; RoW EUR 3,112M +3.7%; China EUR 676M -4.9%. Business gross margin 79.6% (+190bps). SG&A +9.0% against +17.8% sales. BOI EUR 3,291M, 28.4% margin (+380bps). Business net income EUR 2,501M. Tax rate 21.7%. - THE EUR 1,972M NOBODY NETS OUT: Dupixent did EUR 5,154M (+37.6%), above EUR 5B in a quarter for the first time, and is 44.4% of ALL Sanofi sales. But it came out of the Regeneron collaboration — Sanofi books 100% of the revenue and shares roughly half the profit. Q2 profit-sharing back to Regeneron: EUR 1,972M, up from EUR 1,360M. Net alliance drag EUR 1,850M = 16.0% of group revenue. Model Sanofi off the revenue line and you model a company that does not exist. - THE QUARTER THEY KILLED THREE DRUGS: amlitelimab (OX40L, atopic dermatitis) will not go to submission despite a POSITIVE long-term extension; itepekimab (COPD, with Regeneron) discontinued; balinatunfib (oral TNF) failed interim analyses in Crohn's and UC. Impairment EUR 1,031M, of which EUR 952M was amlitelimab. R&D rose 17.9% to EUR 2,233M including >EUR 200M of WIND-DOWN costs. Dupixent also missed both phase 3 primary endpoints in lichen simplex chronicus. - VACCINES IS QUIETLY BREAKING: total vaccines EUR 1,150M, -4.7%. Influenza/COVID -61.7% to EUR 54M. Meningitis/travel/endemic -5.9%. The polio-pertussis-hib franchise grew only 1.4% — and only because Sanofi BOUGHT Heplisav-B (Dynavax), which lifted US sales 77.2%; RoW fell 21.2% on declining Chinese childbirths. Only Beyfortus grew properly, +54.2% to EUR 108M. - BALANCE SHEET: net debt EUR 10,988M on Jan 1 to EUR 15,513M on Jun 30 — up EUR 4.5B in six months (Dynavax -EUR 1,635M, dividend -EUR 4,923M, buyback -EUR 1,009M, FX -EUR 194M, Opella -EUR 220M). Cash EUR 6,350M. EUR 2.3B of notes issued in April at 3.00%/3.375%/3.75%. The EUR 1B buyback is COMPLETE with no successor announced. Intangibles + goodwill EUR 68.3B = 53% of total assets. - GUIDANCE + 2030