Sanofi said it is ready to act swiftly to reach a deal with US biotechnology company Medivation as profit and sales declined, highlighting the need for new medicines to propel growth.
"We have entered this new phase of our discussion with Medivation, which of course we expect will be much more productive,'' chief executive Olivier Brandicourt said. "There is no certainty in terms of timing but we are ready clearly to move quickly."
Sanofi, whose profit fell 8.7 per cent last quarter, is searching for new engines of growth as cheaper copies dent sales of the blockbuster insulin Lantus and a new product for cholesterol faces challenges in the US.
Cancer drugs
Medivation would bring the cancer drug Xtandi as well as two innovative experimental products, allowing Sanofi to rouse its sluggish cancer business.
Sanofi, which employs more than 600 people in the old Genzyme plant in Waterford, will remain financially disciplined in the latest round of talks with Medivation, Mr Brandicourt said. The company this month entered into confidentiality agreements with Sanofi and other parties that have expressed interest in a deal.
Sanofi first offered $9.3 billion, or $52.50 a share, for Medivation. It upped its offer to $58 in cash and $3 in the form of a contingent value right relating to the sales performance of the experimental cancer medicine talazoparib after entering into confidentiality agreements, but Medivation spurned the raised bid as well.
Earnings excluding some items declined to €1.68 billion in the second quarter from €1.84 billion a year earlier, the company said in a statement on Friday. The earnings were just below analyst projections.
Sales fell short of forecasts, sliding to €8.87 billion.
Mr Brandicourt also reiterated the company’s full-year forecast.
“The quarter was somewhat challenging” because of the currency crisis in Venezuela and the loss of patent protection on the blood thinner Plavix in Japan, he said.
Sales drop
Sales of Lantus dropped 16 per cent to €1.2 billion in the quarter.
The company tallies sales in two different ways in its report. By total franchise, Lantus sales were €1.47 billion, beating estimates. Dengvaxia, the company’s dengue vaccine, garnered only €1 million in sales and is unlikely to meet the targets set by the company for the year due to political volatility in Latin America, Sanofi said.
The cholesterol medicine Praluent, developed with Regeneron Pharmaceuticals rose to €21 million, almost doubling from the prior quarter.
Mr Brandicourt said he was “reassured by the latest US prescription trends,” which indicate the medicine is gaining ground, although he expects payer restrictions to continue to hamper growth until the end of the year. – (Bloomberg)
