Sanofi Profit Down as Diabetes Drug Sales Slip--Update

By Noemie Bisserbe 

PARIS---French drugmaker Sanofi SA on Friday reported a fall in second-quarter net profit, hurt by dwindling U.S. diabetes drug sales and adverse currency moves but said it still expected to meet its profit target this year.

The Paris-based drugmaker said net profit declined by 11% to EUR1.16 billion ($1.29 billion) for the three months through June from EUR1.3 billion a year earlier.

Business net income, the company's term for adjusted income excluding the impact of acquisitions and divestments, fell 9% to EUR1.68 billion, just slightly below analysts' expectations of EUR1.7 billion. Sanofi's total sales declined 5% to EUR8.14 billion.

The company said its business earnings per share would remain "broadly stable" in 2016 at constant exchange rates, "barring unforeseen major adverse events."

Sanofi's earnings this quarter reflect continuing pricing pressure in the U.S. on its top selling medicine Lantus, as the French drugmaker scrambles to replenish its new drugs pipeline.

While Genzyme, Sanofi's biotech unit, posted a 18% jump in revenue to EUR1.25 billion, diabetes drug sales, which account for about 20% of the company's revenue, fell 5% to EUR1.6 billion in the second-quarter.

In a bid to revive growth, Sanofi has been in pursuit for months of U.S. biotech Medivation --a Nasdaq-listed company that focuses on hard-to-treat cancers, markets one prostate-cancer therapy, Xtandi, and has two other oncology assets in clinical development.

On July 5, the San Francisco firm finally opened the door to potential takeover talks after months as a reluctant target.

"We are certainly pleased to have the opportunity to engage with Medivation," Chief Executive Olivier Brandicourt said, adding that the company would however remain "financially disciplined throughout this process."

While there could be "no certainty on timing," the company is "ready to move quickly," said Mr. Brandicourt.

But Sanofi could face stiff competition. Medivation has signed confidentially agreements with several suitors. In addition to Sanofi, Pfizer Inc. and Celgene Corp. are among the companies that have signed confidentiality agreements, according to people familiar with the matter.

Write to Noemie Bisserbe at [e-mail]

(END) Dow Jones Newswires

July 29, 2016 04:53 ET (08:53 GMT)

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