Sanofi, riding high from a strong Q2, may put its crosshairs on acquisitions
- Sanofi's Q2 2015 sales were $10.3 billion, beating analysts' estimates of $9.89 billion, while earnings were $2.02 billion, compared with $1.54 billion in Q2 2014.
- CEO Olivier Brandicourt is counting on strong revenues from recently approved drugs, notably Praluent (alirocumab), to provide stability, offset declining sales from older drugs, and support M&A opportunities.
- With the Praluent approval, Sanofi and Regeneron are expected to enjoy more than $1 billion in annual sales for the cholesterol med by 2018.
The consensus is that the second quarter was an excellent one for Sanofi. The company seems to have recovered for the most part from the exit of former CEO Chris Viehbacher in October 2014, while Brandicourt has settled in nicely.
One major concern has been generic erosion of key franchises, such as Lantus, the world's highest-selling insulin product. Sales declined by 5.8% quarter over quarter to $1.88 billion, but Sanofi had already factored that into the larger equation.
The company is also anticipating major competitive pressure against the blood thinners Plavix and Lovenox. However, the advent of Praluent as a revenue-generator represents a major advantage for Sanofi, as do other newly approved drugs, including Aubagio for multiple sclerosis.
Next up for Sanofi: carefully considered M&A activity. "This company has demonstrated they could be very successful at doing mid-size M&A and bolt-ons," Brandicourt told reporters and investors on a conference call. "That’s more what we would consider doing, but of course remaining extremely financially disciplined."