Sanofi lifts profit forecast as second quarter beats expectations
By Natalie Huet
PARIS (Reuters) - French drugmaker Sanofi raised its full-year profit forecast on Thursday as it posted stronger than expected quarterly earnings, driven by its rare disease and diabetes businesses and higher sales in emerging markets.
Shares in Sanofi, which have underperformed the rest of the European pharmaceutical industry after a string of disappointing results last year, rose as much as 4 percent.
Sanofi has sought in recent years to shake off the impact of patent losses on big-selling drugs, such as blood thinners Plavix and Lovenox, by betting on diabetes, rare diseases and over-the-counter treatments. It also revamped its research to launch new, harder-to-copy and pricier biologic drugs.
It has invested 1.4 billion euros ($1.9 billion) so far this year to raise to 22 percent its stake in U.S. biotech Regeneron, its partner on several promising experimental drugs.
One of these, cholesterol drug alirocumab, could reach the U.S market in the second half of next year, at the same time or ahead of U.S. rival Amgen, Chief Executive Chris Viehbacher told reporters on a conference call.
Sanofi now expects business earnings per share (EPS) to grow 6-8 percent this year at constant exchange rates, up from an initial guidance of 4-7 percent that was widely seen by analysts as unusually cautious.
Deutsche Bank's Mark Clark, who has a "buy" recommendation on Sanofi stock, said the market was letting out a sigh of relief after a lot of nervousness around the company's previous guidance. He added that with first-half sales up 5 percent and EPS up 10 percent at constant exchange rates, Sanofi's results were "genuinely encouraging".
Including their latest gain, Sanofi shares are now up roughly 3 percent so far this year but still lag the European healthcare index, up nearly 12 percent amid a wave of mergers and acquisitions. Sanofi stock trades at around 14 times forecast earnings, at a discount to peers whose average price-earnings (PE) ratio is closer to 16. Continuación...