The drugmaker reported that second-quarter profits missed analyst estimates on lower sales of its Ambien sleeping pill and, to appease investors, announced a $4.1 billion share buyback. And to further cope with its declining fortunes, the US sales force will be cut still more.
Hanspeter Spek, head of pharmaceuticals, says that around 10 percent of the US sales force typically leaves each year and another 10 percent were external hires. Sanofi has already cut the US sales force by 11 percent since 2005. "I don't believe overall our sales force will increase - there will be inside restructuring," he tells Reuters.
Generic competition and a dearth of new products caused profit to drop for a fourth quarter, Bloomberg News notes. Ambien sales fell 42 percent. Sanofi, which counted on the weight-loss drug Acomplia to boost growth, had to withdraw the US application last month after an expert panel linked it to suicide and depression. The shares reached the lowest level in more than two years.
"It's not a good day for Sanofi," Paul Diggle, an analyst at Nomura Code Securities, tells Bloomberg. "Share buyback or no share buyback, Sanofi is the least of the five European majors I'd be interested in having."