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UPDATE 3-Sanofi raises outlook but key eczema drug disappoints investors

* Sales of new eczema drug Dupixent disappoint

* Shares down in late trading, Regeneron stock also falls

* Sanofi sees "broadly stable" 2017 earnings (Adds details, comments)

PARIS, July 31 (Reuters) - Sanofi raised its 2017 earnings forecast on the back of strong growth in the second quarter but investors were disappointed with sales of key new eczema drug Dupixent, developed with U.S partner Regeneron Pharmaceuticals.

Shares in Sanofi ended down 1.1 percent on Monday, erasing earlier gains after the French drugmaker said it was now expecting "broadly stable" earnings per share (EPS) this year compared to a previous forecast of stable to lower profits.

Regeneron stock also fell 2.2 percent in New York.

Sanofi Chief Executive Olivier Brandicourt said he was encouraged by Dupixent uptake, which sold 26 million euros ($30.6 million) in its first full quarter on the market. But Morgan Stanley analysts said in a note that sales had fallen short of a buyside consensus closer to $40-50 million.

The U.S. Food and Drug Administration approved the injectable biotech medicine for atopic dermatitis - also known as eczema - in March.

The launch of Dupixent is key for both Sanofi and Regeneron, which are also developing the product for severe asthma.

Bernstein said the Dupixent revenue figure came in between its forecast of 25 million euros and a consensus of 33 million.

Sanofi said 13,000 patients had been prescribed the medication, which also received a positive recommendation from a European Medicines Agency panel earlier this month.

According to Thomson Reuters data, analysts expect Dupixent to reach annual sales of 4.7 billion euros by 2023 and Sanofi sees the product spearheading its drive into greater reliance on high-margin biotech, or biologic, drugs.

Sanofi's second-quarter net income was down 0.5 percent at constant exchange rates to 1.7 billion euros - in line with analysts' forecasts. Total sales rose 5.5 percent to 8.66 billion euros.

Analysts polled by Reuters in partnership with Inquiry Financial had on average been expecting business net profit of 1.7 billion euros and net sales of 8.7 billion.

The geographical mix of sales showed strong momentum in emerging markets and Europe but falling revenues in the U.S.

While nearly all of Sanofi's units recorded double-digit revenue growth in the quarter, sales at the group's diabetes division were down 15 percent due to persistent pricing pressure in the United States, where prescriptions of cheaper copies of the group's treatments are increasing. ($1 = 0.8483 euros) (Editing by Sudip Kar-Gupta and Adrian Croft)