Sanofi (SNY – Analyst Report) reported third-quarter 2016 business earnings of $1.00 per American Depository Share, which beat the Zacks Consensus Estimate of 86 cents by 16.28%. Earnings increased 11.2% on a reported basis and 12.4% at constant currency rates (CER) driven by higher sales and tight cost control.

Third-quarter 2016 aggregate (including Animal Health) sales rose 2.1% on a reported basis and 3.0% at CER to almost €9.7 billion. Sales were hurt by exchange rate movements of roughly 1%. 

Sales rose 7% at CER in the U.S. and 5.6% in Emerging Markets and declined 0.5% in Europe and 12% in the Rest of the World (Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico).

All growth rates mentioned below are on a year-on-year basis and at CER.

Segmental Performance

Sanofi’s new operating model based on five Global Business Units (GBUs) – Sanofi Genzyme (Specialty Care), Diabetes & Cardiovascular, General Medicines & Emerging Markets, Sanofi Pasteur (Vaccines) and Merial (Animal Health) – came into effect on Jan 1, 2016. Under this organizational structure, all Pharmaceutical sales in Emerging Markets are now included under the General Medicines & Emerging Markets GBU.

Sanofi Genzyme/Specialty Care GBU sales increased 16.9% to €1.27 billion, driven mainly by strong uptake of multiple sclerosis drugs Aubagio (up 49.8% to €334 million) and Lemtrada (up 69.1% sequentially to €112 million).

Meanwhile, sales of rare disease drugs like Cerezyme increased 1.6% to €183 million while Myozyme/Lumizyme improved 16.0% to €185 million. Fabrazyme sales were €176 million, up 20.4%. Cerdelga sales came in at €28 million in the third quarter of 2016, up 55.6%.

Oncology sales decreased 2.4% to €363 million due to lower sales of Taxotere and Eloxatin.

Diabetes and Cardiovascular GBU sales declined 2.5% to €1.56 billion. The Diabetes franchise was down 1.5% to €1.81 billion, reflecting lower sales of its best-selling drug, Lantus, in the U.S., due to lower average net price. Lantus sales declined 9.8% to €1.39 billion in the quarter.