Sanofi Profit Down as Diabetes Drug Sales Slip--Update
July 29 2016 - 5:08AM
Dow Jones News
By Noemie Bisserbe
PARIS---French drugmaker Sanofi SA on Friday reported a fall in
second-quarter net profit, hurt by dwindling U.S. diabetes drug
sales and adverse currency moves but said it still expected to meet
its profit target this year.
The Paris-based drugmaker said net profit declined by 11% to
EUR1.16 billion ($1.29 billion) for the three months through June
from EUR1.3 billion a year earlier.
Business net income, the company's term for adjusted income
excluding the impact of acquisitions and divestments, fell 9% to
EUR1.68 billion, just slightly below analysts' expectations of
EUR1.7 billion. Sanofi's total sales declined 5% to EUR8.14
billion.
The company said its business earnings per share would remain
"broadly stable" in 2016 at constant exchange rates, "barring
unforeseen major adverse events."
Sanofi's earnings this quarter reflect continuing pricing
pressure in the U.S. on its top selling medicine Lantus, as the
French drugmaker scrambles to replenish its new drugs pipeline.
While Genzyme, Sanofi's biotech unit, posted a 18% jump in
revenue to EUR1.25 billion, diabetes drug sales, which account for
about 20% of the company's revenue, fell 5% to EUR1.6 billion in
the second-quarter.
In a bid to revive growth, Sanofi has been in pursuit for months
of U.S. biotech Medivation --a Nasdaq-listed company that focuses
on hard-to-treat cancers, markets one prostate-cancer therapy,
Xtandi, and has two other oncology assets in clinical
development.
On July 5, the San Francisco firm finally opened the door to
potential takeover talks after months as a reluctant target.
"We are certainly pleased to have the opportunity to engage with
Medivation," Chief Executive Olivier Brandicourt said, adding that
the company would however remain "financially disciplined
throughout this process."
While there could be "no certainty on timing," the company is
"ready to move quickly," said Mr. Brandicourt.
But Sanofi could face stiff competition. Medivation has signed
confidentially agreements with several suitors. In addition to
Sanofi, Pfizer Inc. and Celgene Corp. are among the companies that
have signed confidentiality agreements, according to people
familiar with the matter.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
July 29, 2016 04:53 ET (08:53 GMT)
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