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Sanofi Buoyed by Biotech and Lower Costs
French drug firm’s earnings give its new CEO momentum in his first few months in the job
Sanofi’s strong earnings give Chief Executive Olivier Brandicourt momentum in his first few months in the job. PHOTO: ASSOCIATED PRESS
PARIS— Sanofi SA on Thursday reported a 68% jump in second-quarter net profit, buoyed by its biotech business and lower costs, providing new chief executive Olivier Brandicourt with momentum in his first few months in the job.
The Paris-based pharmaceutical company said net profit rose to €1.3 billion ($1.43 billion) for the three months through June from €777 million a year earlier.
Business net income, the company’s term for adjusted income excluding the impact of acquisitions and divestments, increased 20% to €1.84 billion, beating analysts’ expectations of €1.70 billion. Sanofi’s total sales rose 16% to €9.38 billion.
Sanofi’s second-quarter earnings show how the French company has been able to overcome the expiry of patents on some of its best-selling drugs by expanding into new areas of business, such as biotech, animal health and diabetes.
In the second quarter, Genzyme, the company’s biotech unit, posted a 27% rise in revenue to €907 million, boosted by strong sales of Aubagio, a multiple sclerosis drug. Vaccine and animal drug sales also rose 9% and 14%, respectively in the second quarter.
But increasing competition in Sanofi’s all-important diabetes market, especially in the U.S., could hamper growth. Diabetes drug sales, which account for more than 20% of the company’s revenue, fell 4% to €1.99 billion, hurt by lower sales of its insulin Lantus, which lost patent protection in the U.S. in May.
To maintain a firm grip on key markets and boost revenue, Mr. Brandicourt,who took over as CEO in April, after the abrupt dismissal of Christopher Viehbacher, will need to successfully launch a steady stream of new drugs.
Earlier this month, Sanofi won approval from U.S. authorities for a new cholesterol drug called Praluent, developed jointly with Regeneron Pharmaceuticals.
The drug, the first of a powerful new class of cholesterol-lowering medicines, is “poised to become a significant growth driver for Sanofi,” said Mr. Brandicourt in a conference call with reporters.
The French drug maker already launched at the end of March a new insulin called Toujeo, which is off to “an encouraging start,” added Mr. Brandicourt. Toujeo recorded sales of €13 million in the second quarter.
Given the right opportunity, Sanofi may also consider bolt-on acquisitions to boost growth, said Mr. Brandicourt.
The French drug maker said it still expected business earnings-per-share to remain stable or grow slightly in 2015, compared with 2014, at constant exchange rates.
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
