Sanofi Lifts Profit Outlook -- Update
October 28 2016 - 4:10AM
Dow Jones News
By Noemie Bisserbe
PARIS--French drugmaker Sanofi on Friday lifted its profit
outlook for the year after posting better-than-expected
third-quarter earnings, and said it planned to complete a EUR3.5
billion ($3.82 billion) share buyback by the end of 2017.
Shares were trading 5.5% higher at EUR72.63 in early trading in
Paris.
Sanofi said it now expected earnings per share--excluding the
impact of acquisitions and divestments--to grow between 3% and 5%
in 2016 at constant exchange rates. Sanofi previously said earnings
per share would remain "broadly stable" this year. Weakening
currencies could, however, have a 4% negative impact on revenues in
2016, the company warned.
The Paris-based drugmaker said net profit rose by 3% to EUR1.67
billion for the three months through September, buoyed by higher
biotech drug and vaccine sales and lower costs.
Business net income, the company's term for adjusted income
excluding the impact of acquisitions and divestments, increased 10%
to EUR2.3 billion, above analysts' expectations of EUR1.93 billion,
according to a Dow Jones Newswires poll. Sanofi's total sales
increased 2% to EUR9.03 billion.
Sanofi's results this quarter show how the French drugmaker's
long-drawn-out efforts to cut costs to boost its profitability are
finally paying off. However, the dwindling revenue of its
all-important diabetes division reflect continuing pricing pressure
in the U.S. market.
Diabetes drug sales, which account for about 20% of the
company's revenue, fell 2% to EUR1.81 billion in the third-quarter,
hurt by a 10% drop in Lantus insulin sales. Sanofi's vaccine
division and its biotech unit Genzyme, which respectively posted a
14% and 17% jump in the third-quarter, helped offset lower diabetes
sales this quarter.
To boost growth, Sanofi has pledged to refocus the company on
fewer businesses, and replenish its new drugs pipeline.
In August, however, Sanofi was defeated by pharmaceutical giant
Pfizer Inc. in the race to acquire U.S. innovative cancer drugmaker
Medivation Inc.
One of the company's promising new drugs, rheumatoid arthritis
treatment Sarilumab, also suffered a setback, after regulators
found manufacturing deficiencies at a French plant, Sanofi said
Friday.
"These deficiencies may potentially impact the timing of the
approval," Chief Executive Olivier Brandicourt told reporters in a
conference call.
The company previously said it expected to receive approval for
Sarimulab from the U.S. Food and Drug Administration, or FDA, in
the fourth quarter of 2016.
"We are working with the U.S. FDA to resolve these issues as
quickly as possible," Mr. Brandicourt added.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
October 28, 2016 03:55 ET (07:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From Apr 2023 to Apr 2024