Sanofi (Sanofi (SNY)) reported second-quarter earnings on Thursday that beat expectations, but the real story might be what the company's CEO said about its pipeline: the problems weren't about science, but about decision-making.

Sales for the quarter came in at $13.482 billion (€11.597 billion), topping the consensus estimate of $12.65 billion. That's a 16% increase year over year, or 17.8% in constant currency. Adjusted EPS was €2.09 ($1.21 per ADS), also beating expectations.

Dupixent Keeps Printing Money

The star of the show remains Dupixent, the blockbuster immunology drug that Sanofi shares with Regeneron. Sales jumped 37.6% to €5.154 billion, marking the first time the drug has crossed the €5 billion quarterly threshold. Strong volume growth across approved indications and a leading market position in its disease areas drove the performance.

But not everything is rosy. Vaccines sales fell 4.7% to €1.15 billion, hurt by lower sales of influenza, meningitis, travel, and endemic vaccines. Beyfortus, the respiratory syncytial virus antibody, saw sales rise 54.2% to €108 million, boosted by expanded availability in the Southern Hemisphere and other regions.

A Tougher R&D Approach

CEO Belén Garijo didn't mince words about the company's recent pipeline setbacks. In a call with analysts, she said the issues reflected weaknesses in decision-making, not a lack of scientific capability. "We are raising the bar for advancing programs into late-stage trials, emphasizing greater scientific rigor, fact-based decisions, and clearer accountability," she said.

Sanofi is conducting an ongoing portfolio review, and Garijo didn't rule out discontinuing more pipeline assets. The goal is to focus resources on medicines with the strongest scientific merit, highest unmet need, and greatest commercial potential. Already, the company has halted or discontinued several programs, including amlitelimab, itepekimab, and balinatunfib.

2026 Outlook Raised, But Second Half Looks Slower

Despite the pipeline challenges, Sanofi raised its full-year 2026 sales growth forecast to around 10% at constant exchange rates, up from prior guidance of high single-digit percentage growth. The company now expects fiscal 2026 sales of $55.789 billion, close to the consensus of $55.85 billion.

Garijo also boosted Dupixent's long-term outlook, saying sales are now expected to reach around €25 billion in 2030, complemented by approximately €10 billion from other pharma launches.

But the second half of 2026 is expected to be slower. The company cited tougher year-over-year comparisons, including last year's new Dupixent indication launches and the July 2025 consolidation of AYVAKIT. There will also be fewer one-time gross margin benefits, no additional Regeneron development-balance reimbursement, and a smaller boost from share repurchases.

Market Reaction

Investors seemed focused on the pipeline uncertainty and slower second-half outlook. Sanofi shares were down 5.65% at $42.31 at the time of publication Thursday.

The message from management is clear: Sanofi is done with sloppy decision-making. Whether that translates into a stronger pipeline remains to be seen, but at least the company is owning up to its mistakes.