STIFF competition saw group sales at Paris-based drug manufacturer Sanofi rise at a lower than expected 5.1 per cent during the last quarter.
The disappointing result sent Sanofi’s shares tumbling 10.64 per cent yesterday to close at €74.53 in Paris. Despite the slowdown and disappointing forecast for next year, Sanofi reiterated its ability to hit its 2014 profit forecast.
Growth in its diabetes drugs range, which accounts for around 20 per cent of revenues, slowed to 8.3 per cent from 16.2 per cent in the second quarter as tough price competition in the US took its toll, with analysts believing that sales of Sanofi’s diabetes drugs will flatline in 2015.
“We have recently seen a more challenging US diabetes price environment which will impact our diabetes sales throughout 2015, while growth platforms globally are expected to continue to show solid growth,” said chief executive Christopher Viehbacher.
One bright spot for the company was the 24 per cent sales growth delivered by its subsidiary Genzyme, the Boston- based biotechnology company that was acquired by Sanofi in 2011.
Overall, company revenue in the third quarter was up 5.1 per cent at constant exchange rates on the same time last year at €8.7bn (£6.85bn).
S&P Capital analyst Carl Short said he believed that fears over diabetes drug competition could be overdone with launches of new drugs providing mitigation in 2015, saying: “On broadly unchanged earnings per share estimates, we retain our 12-month target price of €90. We move to ‘strong buy’ from ‘buy’ with the shares now 16 per cent below our target.”