Sanofi pledges to keep up its restructuring efforts
PARIS (Reuters) – Sanofi will continue to implement cost savings after having reached a 1.5 billion euros ($1.75 billion) cost reduction target a year ahead of expectations, and added that several of its key drugs were selling well.
The French drugmaker, hurt by declining revenue at its diabetes business in recent years, is eyeing a return to growth from the second half of 2018 as it builds upon acquisitions made earlier this year.
“It’s only the beginning, and we will continue to be very efficient,” Chief Executive Olivier Brandicourt told investors, regarding the cost savings, at a Bank of America Merrill Lynch conference in London on Friday.
The CEO did not elaborate further but referred to a reorganization of Sanofi’s global business units unveiled earlier this week.
“In the developed world we are moving from five business units to four and that’s going to be very helpful in addition to generating synergies, savings,” said Brandicourt.
The executive flagged atopic dermatitis drug Dupixent, for which Sanofi has placed great hopes because of its potential to treat other diseases, as a key product that could make a difference between Sanofi and its rivals in the future.
The U.S. Food & Drug Administration regulator is expected to approve Dupixent in asthma before the end of the year.
“We are very satisfied with the way Dupixent has been launched and continues to exceed expectations. Kevzara also is actually competing very effectively and gaining market share and if you combine the two at our last quarter we are not far from annualizing now at blockbuster levels,” said Brandicourt.
Kevzara, prescribed for adults suffering from moderate-to- severe rheumatoid arthritis, and Dupixent were both developed by Sanofi and its U.S partner Regeneron.
Sanofi said sales of Dupixent had totaled 176 million euros ($205.9 million) in the second quarter, while Kevzara recorded revenue of 20 million.
Earlier this year, Sanofi bought U.S hemophilia specialist Bioverativ for $11.6 billion and Belgium’s Ablynx, which is developing an experimental drug for a rare blood disorder, for 3.9 billion euros.
“That integration is going very well from our point of view and we’ll build on those foundations over time,” Brandicourt said, adding the company had not changed its approach when it came to mergers and acquisitions.
“We want to stay pretty disciplined and continue to have good credit ratings. And so we have about 6-7 billion euros if we wanted to go after very specific bolt-on acquisitions, helping us to strengthen our position.”
Sanofi shares, which were flat in mid-session trading, have risen by around 5 percent so far in 2018.
($1 = 0.8547 euros)
Reporting by Matthias Blamont; Editing by Sudip Kar-Gupta