Sanofi Plant, Key to New Drugs, Wins Tentative U.S. Backingby
Formal inspection at Normandy site expected this quarter
Drugmaker sees adjusted EPS stable to down 3% this year
Sanofi’s efforts to fix manufacturing deficiencies at a crucial French site won the tentative backing of U.S. regulators, alleviating concern about two new medicines key to growth.
The Food and Drug Administration has “deemed our Le Trait plant to be acceptable,” Chief Executive Officer Olivier Brandicourt said on a conference call. That’s no official clearance, though: a formal inspection will take place this quarter, he said. Sanofi rose as much as 3.8 percent in Paris trading, the steepest gain in three months.
Two new experimental therapies slated for U.S. regulatory approval this year -- sarilumab for rheumatoid arthritis and dupilumab for a severe form of eczema -- are processed at the plant. Brandicourt is counting on them to help revive growth as the company’s blockbuster insulin Lantus faces competition from cheaper rivals. Sanofi said Wednesday earnings per share excluding some items may fall as much as 3 percent this year.
While analysts had expected profit to decline in 2017 as Lantus comes under increased pressure from a copycat medicine manufactured by Eli Lilly & Co., the guidance may prompt them to boost estimates, Peter Verdult, an analyst at Citigroup Inc. in London, wrote in a note to clients.
Sanofi and partner Regeneron Pharmaceuticals Inc. said in October that they failed to win approval from U.S. regulators for sarilumab because of manufacturing deficiencies at the Le Trait plant. Sanofi plans to resubmit the sarilumab application in the U.S. in the first quarter, subject to a successful FDA inspection of the facility, Brandicourt said Wednesday. What’s more, problems at the plant probably won’t derail the expected ruling on skin drug dupilumab at the end of March, he said.
Sanofi shares rose 2.7 percent to 77.92 euros at 11:08 a.m. in Paris. The stock has returned 5.8 percent including reinvested dividends in the past year, compared with a 0.7 percent gain for the Bloomberg index that tracks European pharma stocks.
Profit excluding some items declined to 1.61 billion euros ($1.72 billion) last quarter from 1.71 billion euros a year earlier, the Paris-based company said in a statement. That compares with a 1.59 billion-euro average of 11 analyst estimates compiled by Bloomberg. Sales rose 3.3 percent to 8.87 billion euros in the quarter.