Sanofi sees strong profit growth from 2018

Healthcare company expects €12bn in sales by 2025 from six key product launches

Sanofi said growth would be driven by 18 product launches scheduled for the next five years. Photographer: Robert Pratta/Reuters

Sanofi said growth would be driven by 18 product launches scheduled for the next five years. Photographer: Robert Pratta/Reuters

 

Sanofi said on Friday investment in products to compensate for declining diabetes sales and cost cuts would prevent significant profit growth in the next two years.

Earnings per share will, however, grow faster than sales at constant exchange rates from 2018, by which time it plans to have taken out some €1.5 billion of costs, the French drugmaker said. Sanofi also said ahead of a presentation of its five-year strategic plan to investors in Paris it would raise annual research and development spending to €6 billion at constant exchange rates by 2020.

“As a result of investments in launches, headwinds in diabetes and the phasing of cost savings, Sanofi does not expect to show any meaningful bottom-line growth over 2016-2017,” the company said in a statement.

“Beginning in 2018, however, Sanofi expects to grow business earnings per share faster than sales, reflecting its improved sales mix and the full capture of cost efficiencies.”

Aiming to remain a diversified healthcare company while many competitors such as Switzerland’s Roche have chosen to specialise in recent years, Sanofi said the savings would come from a reorganisation, due to be effective next year, as well as from a “reshape” of its plant network.

The firm said growth would be driven by 18 product launches scheduled for the next five years. Among these, six key launches such as Toujeo, a next-generation insulin launched at the end of March in the United States to follow patent-expiring blockbuster Lantus, and anti-cholesterol Praluent, are expected to generate aggregate peak sales of between €12 billion and €14 billion by 2025.

– (Reuters)