Sanofi-Aventis SA, the French
drugmaker that’s planning the takeover of Genzyme Corp.,
reported a 7.6 percent increase in second-quarter profit on
higher sales of its Lantus and Apidra diabetes treatments.
Profit climbed to 2.48 billion euros ($3.23 billion), or
1.90 euros a share, excluding costs such as writedowns and
merger expenses, from 2.3 billion euros, or 1.76 euros, a year
earlier, Sanofi said in an e-mailed statement today. That’s more
than the 2.31 billion-euro average of 17 analysts surveyed by
Bloomberg.
Chief Executive Officer Chris Viehbacher has support from
his board of directors to offer as much as $70 a share for
Cambridge, Massachusetts-based Genzyme, or about $18.7 billion,
said three people with knowledge of the situation. Sanofi is
preparing a formal approach in coming days, the people said,
speaking on condition of anonymity.
“Sanofi is still facing a patent cliff and accelerating
acquisitions to help solve this problem is the right way to
go,” said Jerome Forneris, who helps manage about $10 billion,
including Sanofi shares, at Banque Martin Maurel in Marseille.
Acquiring Genzyme, the world’s largest maker of medicines
for genetic diseases, would help Sanofi expand in biotechnology,
a priority for Viehbacher. The 50-year-old chief executive is
under pressure to replenish Sanofi’s pipeline as competition
from lower-priced generic drugs threatens more than 20 percent
of revenue by 2013.
Lovenox Rival
Viehbacher declined to comment on Genzyme today in a
conference call with reporters. He said the company remains
“opportunistic” on acquisitions and is looking for deals worth
between $5 billion and $20 billion that will add to earnings.
Sanofi is “disciplined” about takeovers and rejects “mega-
merger-type deals,” he said.
Second-quarter revenue at Sanofi advanced 4.6 percent to
7.78 billion euros, the Paris-based company said today. Sales of
the diabetes therapy Lantus, which was Sanofi’s bestselling drug
last year, jumped 17 percent to 926 million euros. Apidra, also
a diabetes treatment, surged 26 percent to 44 million euros.
“I’m pleased with the group’s quarterly performance in an
environment impacted by the U.S. healthcare reform, price cuts
in Europe and continued competition from generics,” Viehbacher
was cited as saying in today’s statement.
U.S. regulators last week approved a generic rival to a
blood thinner called Lovenox, Sanofi’s second best-selling
medicine in 2009, forcing the French drugmaker to slash its
full-year profit forecast. Earnings per share will be unchanged
at best and may decline as much as 4 percent at constant
exchange rates, Sanofi repeated today. The previous estimate was
for an increase of 2 percent to 5 percent in 2010.
Chattem Contribution
Sanofi has spent about $17 billion on 25 acquisitions since
Viehbacher, a former GlaxoSmithKline Plc executive, joined in
December 2008, according to data compiled by Bloomberg. The
purchase earlier this year of Chattem Inc., the U.S. maker of
Gold Bond medicated powder and other non-prescription health
products, contributed 96 million euros to Sanofi’s sales last
quarter.
Viehbacher also has shut or sold plants and canceled the
least promising research projects in a bid to trim 2 billion
euros in costs and ensure 2013 earnings are at least equal to
2008 profit. Sanofi reiterated today that the approval of a
Lovenox generic will not affect its 2013 targets.
“While the entrance of a generic Lovenox is a negative hit
to earnings, we believe this development removes a major
overhang that has been weighing against the stock,” Luisa Hector, an analyst at Credit Suisse in London, wrote in a July
26 note to investors. She rates the shares an “outperform.”
Sanofi stock has lost 17 percent this year, giving the
drugmaker a market value of 59.6 billion euros. It’s the fifth-
worst performing stock among the 17-member Bloomberg Europe
Pharmaceutical Index, which slipped 3.1 percent in the period.
To contact the reporter on this story:
Albertina Torsoli in Paris at
atorsoli@bloomberg.net
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