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Rating action

Scope Ratings GmbH (Scope) has affirmed its AA/Stable issuer rating on France-based pharmaceutical company Sanofi S.A. (Sanofi). Scope has also affirmed the ratings for senior unsecured debt at AA and short-term debt at S-1+.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

The issuer rating reflects Sanofi’s strong business risk profile (assessed at AA-) as one of the leading global pharmaceutical companies with a well-diversified portfolio. The company benefits from robust geographic diversification, a strong presence in high-growth therapeutic areas, and solid R&D capabilities that support innovation and pipeline sustainability. The issuer rating is further supported by an even stronger financial risk profile (assessed at AA+), characterised by prudent financial policy, low leverage with debt/EBITDA* typically below 1.0x, and substantial liquidity.

Business risk profile: AA- (unchanged). Sanofi’s competitive position remains strong, anchored in its leadership in immunology, rare diseases, and vaccines. This is bolstered by a sustained blockbuster portfolio, which currently consists of about 10 products, and a strategy to launch more potential blockbusters. Dupixent, the cornerstone product for type-2 inflammatory diseases, generated sales of EUR 13bn in 2024, making it the fourth best-selling drug worldwide. Peak sales are expected to exceed EUR 22bn by the end of the decade, driven by strong prescription trends and volume growth across all indications. Dupixent accounts for over 30% of company sales, creating concentration risk. However, this risk is mitigated by pipeline expansion and diversification into high-growth areas.

Sanofi aims to strengthen its global leadership in vaccines, targeting EUR 10bn in annual vaccine sales by 2030, supported by differentiated offerings across influenza, PPH and booster vaccines franchise, Beyfortus (RSV), which achieved blockbuster status in its first full year as well as the meningitis travel and endemic franchise. The company is leveraging market share gains and next-generation platforms to consolidate its position as a top-tier vaccine provider worldwide.

Patent expiry risk is limited in the near term: Aubagio and older diabetes products such as Lantus have already lost exclusivity. In addition, no major patent cliffs remain until Dupixent’s loss of exclusivity post-2031, providing medium-term visibility. This allows Sanofi to focus on pipeline execution rather than defending existing franchises. Recent launches, including ALTUVIIIO, Nexviazyme, Rezurock, Sarclisa, Cablivi, Xenpozyme, Enjaymo, Tzield, Ayvakit, Nuvaxovid, Qfitlia, and Wayrilz, strengthen the current portfolio and contribute to near-term growth. In parallel, Sanofi plans to expand its Phase 3 pipeline, reinforcing its focus on immunology and other core areas. Late-stage assets such as amlitelimab and tolebrutinib are expected to become key growth drivers. Combined with the objective to achieve over EUR 10bn in cumulative sales from new pharma launches by 2030, these initiatives aim to mitigate growing dependence on Dupixent and secure sustainable growth.

Following portfolio simplification, Sanofi’s therapeutic focus has narrowed to four core areas: immunology, rare diseases, vaccines, and neurology. The company completed its transition to pure-play biopharma with the EUR 10.7bn Opella divestment in 2025, redeploying capital towards R&D and bolt-on acquisitions. Recent deals, including Blueprint Medicines and Vigil Neuroscience, will likely strengthen immunology and neurology franchises and increase US exposure (already 49% of 2024 sales), aligning with Sanofi’s commitment to invest USD 20bn in US manufacturing, R&D and workforce over five years, excluding M&A and business development, to mitigate tariff risk.

Profitability – as measured by EBITDA margin – has moderated to below 30% compared to 2022–2023, reflecting higher R&D investment to accelerate pipeline expansion. Scope expects margins to recover gradually, supported by new product launches, an improved product mix, and greater discipline on operational costs.

Sanofi has an extensive track record of providing innovative products that contribute to human health and well-being (credit-positive ESG factor). However, Scope notes that Sanofi is also exposed to high regulatory and reputational risks inherent to the pharmaceutical industry (credit-negative ESG factor).

Financial risk profile: AA+ (unchanged). Sanofi's consistent generation of significant positive free operating cash flow (FOCF) retains a strong balance sheet and underpins its financial risk profile.

Weaker EBITDA caused leverage, as measured by debt/EBITDA, to deteriorate to 1.1x in 2024 (YE 2023: 0.9x versus YE 2022: 0.7x). For 2025-2027, Scope expects leverage to be maintained at around 1.0x in the absence of a significant acquisition and corresponding debt issuance. Accordingly, the agency expects funds from operations/debt to remain at above 70%.

Debt protection, as measured by EBITDA interest coverage, continues to be solid at levels exceeding 10x. This reflects the low burden on cash flows from interest obligations.

Sanofi’s FOCF generation remains solid, although it moderated in 2024 as the company accelerated investments in R&D and pipeline development. FOCF/debt declined to 66% in 2024 from 86% in 2023, reflecting higher operating cost and strategic reinvestment rather than structural weakness. Despite this temporary dip, cash generation continues to comfortably support bolt-on acquisitions and shareholder returns without compromising credit quality.

Scope’s rating case assumes bolt-on transactions rather than large acquisitions in 2026-2027. The large volume of acquisitions that took place in 2025 (over EUR 10bn) was partially funded internally and via debt issuance. Going forward, the agency expects Sanofi to adhere to its established capital allocation priorities, balancing shareholder returns, investment in growth, and debt management, while maintaining credit metrics consistent with the current rating.

Liquidity: adequate (unchanged). Liquidity remains adequate. The absence of significant short-term debt, coupled with positive FOCF and a substantial cash buffer (unrestricted cash reserves of around EUR 7bn as at FY 2024 and EUR 8bn of undrawn committed credit facilities), mitigates refinancing risks. This leads to a robust overall liquidity ratio of well above 200%.

Supplementary rating drivers: credit-neutral (unchanged). The rating incorporates no adjustments related to financial policy, peer group considerations, parent support, or governance and structure.

The decision to allocate EUR 5bn of the EUR 10bn Opella proceeds to share buybacks reflects a one-off commitment to shareholder returns, enabled by exceptional liquidity from the divestment. Similarly, the acquisition volume of over EUR 10bn in 2025 was driven by strategically attractive targets. Scope considers these actions exceptional and not indicative of a structural shift in financial policy. Management has reiterated its commitment to a neutral financial policy, focused on organic growth, selective bolt-on acquisitions, and maintaining a conservative leverage profile in line with its AA rating and available headroom.

One or more key drivers of the credit rating action are considered ESG factors.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that Sanofi can maintain debt/EBITDA at around 1.0x over the next few years. This assumption is contingent upon the company's continued utilisation of its substantial cash reserves for smaller acquisitions, rather than larger ones.

The upside scenarios for the ratings and Outlook are (individually):

1. Greater clarity on Sanofi’s use of its significant financial headroom and more visibility on the company’s ability to move closer to a net cash position (remote).
    
2. An improving business risk profile via higher profitability and enhanced diversification (remote).

The downside scenarios for the ratings and Outlook are (individually):

1. Deteriorating credit metrics such as funds from operations/debt falling back below 60% or FOCF/debt below 40% on a sustained basis.
    
2. A business risk profile deterioration due to weakening profitability or diversification.

Debt ratings

The rating on senior unsecured debt has been affirmed at AA, in line with the issuer rating.

The short-term debt rating has been affirmed at S-1+. This reflects Sanofi’s sustained credit quality, supported by robust internal liquidity and strong access to external funding through capital markets and bank debt, as signalled by bond issuances and available credit facilities.

Environmental, social and governance (ESG) factors

The pharmaceutical industry is subject to significant ESG-related risks, particularly in the areas of regulatory compliance and reputational management. For Sanofi, one of the main regulatory risks stems from potential large-scale litigation, especially in the United States, a market that contributes heavily to its revenues. These risks can arise from issues such as patent disputes, product liability claims, and violations of regulatory requirements set by authorities like the FDA. Legal challenges in such cases can result in substantial financial costs, which might impact the company’s balance sheet and credit profile.

Reputational risks for Sanofi are tied to broader industry challenges, including public concerns over high drug pricing and transparency. Moreover, the company's ability to manage the expiration of existing drug patents while launching revenue-generating alternatives is critical. Failure to achieve a smooth transition can lead to revenue declines, affecting financial performance and market confidence.

On the positive side, Sanofi’s robust commitment to advancing global health and well-being through innovative treatments reinforces its strong market position and creditworthiness. The company's dedication to addressing unmet medical needs has established it as a trusted leader in the pharmaceutical sector, bolstering its financial stability.

All rating actions and rated entities

Sanofi S.A.

Issuer rating: AA/Stable, affirmation

Short-term debt rating: S-1+, affirmation

Senior unsecured debt rating: AA, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Pharmaceutical Companies’ Rating Methodology, 4 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Azza Chammem, Associate Director
Person responsible for approval of the Credit Ratings: Sebastian Zank, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 7 September 2017. The Credit Ratings/Outlook were last updated on 6 December 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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