Sanofi Stumbles as Key Medicines' Sales Spark Growth Concerns
Sanofi sees “huge potential” from the field of blood disorders after completing the acquisition of Bioverativ.
(Bloomberg) -- A handful of Sanofi’s top drugs stumbled in the first quarter, sparking concern about growth as the French drugmaker attempts to become a leader in blood disorders via $16 billion in acquisitions.
The stock fell as much as 2 percent in Paris trading after the company reported declining profit and revenue for the quarter and pointed to a new period of expansion starting in the second half.
Some of the medicines Chief Executive Officer Olivier Brandicourt has singled out as future drivers of growth, such as Dupixent for a severe form of eczema, had disappointing sales, casting doubt over the company’s expectation of a turnaround. A new insulin intended to succeed the aging blockbuster Lantus, called Toujeo, also missed estimates.
A weak first quarter in which none of the main medicines are doing well “just doesn’t leave you with a good flavor” said Sam Fazeli, a Bloomberg Intelligence analyst in London. “That’s the issue.”
The drugmaker said it will buy back 1.5 billion euros ($1.8 billion) worth of shares -- a plan that comes after the stock slumped 23 percent over the past year, one of the worst performances in the Bloomberg Europe 500 Pharmaceuticals Index.
As Lantus sales slide, the Paris-based drugmaker is seeking to rebuild a position in cancer and testing Dupixent to treat a variety of diseases. The drug garnered 107 million euros in revenue last quarter. Analysts had forecast sales of 149 million euros, according to data compiled by Bloomberg.
Sanofi cited an impact on Dupixent of about 30 million euros from trade inventory reduction as well as a higher contribution to patient assistance programs at the start of the year. But even adjusted for that, it would have missed analysts’ forecasts, said Michael Shah, another BI analyst in London.
Dupixent “is pretty much their only growth driver outside of M&A,” Shah said.
Sanofi’s recent acquisition spree is intended to build a new franchise in blood disorders. Last month, the company completed the purchase of Bioverativ Inc. to expand in hemophilia. To complement that, it’s also buying Ablynx NV, which has an experimental medicine for another rare and related disorder.
The market for hemophilia medicines, part of a broader rare disease segment that’s lured other large drugmakers lately, will probably be worth as much as $15 billion a year by 2025, expanding from about $10 billion at the moment, according to Brandicourt.
--With assistance from Phil Serafino
To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net.
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade, John Lauerman
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