Sanofi 'reshapes' as diabetes franchise continues to flounder
- Although sales increased for Sanofi in the third quarter, growth was led by two units while other key units underperformed, pushing the French drugmaker to conduct a "re-shaping of the portfolio."
- The company said Friday it brought in €9.65 billion ($10.56 billion) during the third quarter, up from €9.46 billion ($10.35 billion) during the same period a year prior.
- Both the Diabetes & Cardiovascular and the General Medicines & Emerging Markets portfolios in Sanofi's business had negative growth during the quarter, impacted by the struggling Lantus franchise and slowing sales of Plavix (clopidogrel) in Japan.
Sanofi is taking a closer look at what's working (and what isn't) as sales continue to underperform for the French pharma. While its specialty pharmaceutical unit, the former biotech Genzyme, grew nearly 17% year-over-year to €1.27 billion, sales in the Diabetes & Cardiovascular franchise — once Sanofi's calling card — fell 2.5% to €1.59 billion.
Sales of Lantus, which has brought in billions for Sanofi, have been declining due to increased competition in the diabetes sector, as well as stepped-up pressure from payers. The company reaffirmed its previous guidance for the franchise, predicting a decline of 4% to 8% annually through 2018. As a taste of what might be in store for Sanofi, Lantus sales plummeted €499 million this quarter.
"I would like to briefly update you on the reshaping of our portfolio. First, we have made a definitive decision to initiate a carve-out process and divest the generics portfolio in Europe. We will keep you informed as we make progress with these plans," said CEO Olivier Brandicourt on the third quarter earnings call with analysts.
"Separately, you may recall our intention to terminate the Sanofi Pasteur/MSD (Merck & Co.) joint venture in Europe and we remain on track to conclude this over the coming months," he added.
Brandicourt added the company is still interested in oncology, despite losing out on the Medivaiton acquisition to Pfizer. But Sanofi will also focus its M&A strategy on other areas like immunology and multiple sclerosis while it tries to build out its pipeline.
- Sanofi Earnings Presentation
Follow Lisa LaMotta on Twitter