Sanofi Profit Little Changed as Drugmaker Pursues Medivation

  • CEO Brandicourt `concerned' patients aren't getting Praluent
  • Outlook confirmed for `broadly stable' profit in 2016

Sanofi’s first-quarter profit showed little change as a new cholesterol medicine faced hurdles in the U.S., underscoring the French drugmaker’s drive to kindle growth with a takeover of Medivation Inc.

Earnings excluding some costs were 1.72 billion euros ($1.96 billion), compared with 1.73 billion euros a year earlier, the Paris-based drugmaker said Friday in an e-mailed statement. Analysts predicted 1.69 billion euros, the average of eight estimates compiled by Bloomberg. Sales fell 1.9 percent and the stock had its biggest slide in three months.

Chief Executive Officer Olivier Brandicourt on Thursday disclosed that Sanofi made a $9.3 billion cash offer for Medivation, which the San Francisco-based maker of cancer drugs has spurned. Brandicourt, who took over a year ago, is searching for new avenues of growth as generics eat into sales of the company’s best-selling product and the promising new cholesterol drug called Praluent faces challenges in the U.S.

Praluent, developed with Regeneron Pharmaceuticals Inc., garnered 12 million euros in sales last quarter, hampered by the administrative burden U.S. payers placed on cardiologists and other doctors who prescribed it.

Too Much Paperwork

The cholesterol-lowering injection, introduced in the U.S. in July, is lagging behind Repatha, a rival product by Amgen Inc., and faces an intellectual property fight. Even so, comments by Amgen executives late yesterday echoed Brandicourt’s. The company estimated that 77 percent of Repatha prescriptions were denied by insurance and that the paperwork involved was frustrating cardiologists.

“We are concerned that eligible patients are not getting access” to the medicine, Brandicourt said on a conference call Friday. Sanofi conducted a survey of doctors and found that payers’ requirements “created a very significant burden for them” that discouraged or delayed Praluent uptake.

Sanofi shares fell 3.6 percent to 73.47 euros at noon in Paris, the steepest intraday decline since Jan. 28, giving the company a market value of about 96 billion euros.

Friendly Chat

France’s largest drugmaker opted to make public its approach to Medivation after two weeks of silence in the hope of eliciting a response from the U.S. company’s board, Brandicourt said. A friendly deal is “in everyone’s interest,” he said. So far, Sanofi hasn’t heard back from Medivation, he added.

With one cancer medicine on the market and another two making their way through the lab, Medivation is “an attractive opportunity to accelerate our development plan,” Brandicourt said. Medivation’s Xtandi, for prostate cancer, could bring in revenue of $812 million this year, based on the average analyst estimate compiled by Bloomberg. Sanofi sells its own drug for prostate cancer, called Jevtana.

Sanofi reiterated that it expects its core measure of earnings this year to be “broadly stable” at constant currencies. Sales of its best-selling insulin Lantus fell 11 percent to 1.4 billion euros at constant exchange rates in the first quarter as the company cut prices in the U.S.

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