Sanofi’s problems

France-based group Sanofi reported this week its 2016 results. Like other European companies – i.e. Merck and Novartis – Sanofi is affected by the whole diabetes business slowing down. Sales volume, indeed, was €33.8bn, versus €34bn in 2015. In addition, Sanofi pays the price for its blockbuster Lantus losing patent protection and for the drop in insulins prices in the US market. EBIT dropped by 9% to €5.7bn. The hard times for diabetes are partially offset by Sanofi’s leading businesses – Genzyme (+12.6%), Vaccines (3.7%) and Consumer Healthcare (+2.7%). The US are Sanofi’s top market both for growth rate (+11%) and sales volume (€3.3bn); instead, Asia, Europe and ROW are slowing down. The price cut plan, started in 2016, is expected to generate approximately €1.5bn as soon as next year. While announcing the results, CEO Olivier Brandicourt said he is very confident about the potential blockbusters dupilumab (eczema) and sarilumab (rheumatoid arthritis). Moreover, Brandicourt stated Sanofi can grow organically as well, not only through acquisitions. Yet, analysts and investors do not share his point and urge a large acquisition, having the company failed to take over Actelion and Medivation.
(Source Les Echos)