Sanofi's fourth-quarter profit more than doubles; Genzyme sales jump

Sanofi announced Wednesday that fourth-quarter net income more than doubled versus the prior year to 790 million euros ($841 million), while sales increased 3.3 percent to 8.9 billion euros ($9.5 billion), meeting analyst estimates. Revenue from pharmaceuticals in the three-month period lifted 3.4 percent on a constant currency basis to 7.5 billion euros ($8 billion).

The company added that sales in its diabetes and cardiovascular unit climbed 3.8 percent on a constant currency basis to 1.7 billion euros ($1.8 billion), with revenue from vaccines up 3.7 percent to 1.4 billion euros ($1.5 billion). Meanwhile, sales from Sanofi's Genzyme division rose 12.6 percent to 1.3 billion euros ($1.4 billion), driven by revenue from multiple sclerosis products.

For the current year, the drugmaker said that business earnings per share are estimated to be stable or decline by up to 3 percent. However, Sanofi indicated that currency movements could have a 3 percent to 4 percent positive impact on revenue in 2017.

Citigroup analyst Peter Verdult noted that while analysts had expected profit to decline in 2017 as Lantus comes under increased pressure in the US from Eli Lilly and Boehringer Ingelheim's long-acting follow-on insulin Basaglar, the guidance may prompt them to boost estimates. In the fourth quarter, sales of Lantus slipped 5.1 percent on a constant currency basis to 1.5 billion euros ($1.6 billion).

CEO Olivier Brandicourt remarked "2016 was a busy year for Sanofi," adding "we successfully closed the Boehringer Ingelheim asset swap, lifting us into a leadership position in consumer healthcare." The executive suggested that the company is "not in a hurry to do M&A" as it looks to return to growth, adding "the only principle we will follow is to create value for shareholders and always consider the strategic fit."

Sanofi has lost out on two recent acquisitions, with Pfizer in August winning a $14-billion bidding war for Medivation. Meanwhile, in December, talks with Actelion ended after the companies failed to reach an agreement, with Johnson & Johnson later agreeing to buy the Swiss drugmaker for $30 billion.

Sanofi is also looking for its pipeline to help boost growth, although it faced a setback in October when the FDA rejected approval of the rheumatoid arthritis therapy sarilumab, citing deficiencies at the company's Le Trait facility in Normandy, France, where the IL-6R antibody is filled and finished. Brandicourt said Wednesday that the FDA has deemed the "plant to be acceptable," although a formal inspection will take place this quarter.

The executive added that along with partner Regeneron Pharmaceuticals, the company expects to resubmit an application for sarilumab to the FDA in the first quarter, subject to a successful FDA inspection of the Le Trait facility. Meanwhile, Brandicourt suggested that issues at the plant aren't likely to affect a ruling from the agency due by the end of March on Sanofi's application for the eczema treatment dupilumab.