PARIS (Reuters) - Sanofi (SASY.PA) said it expected stable earnings per share this year after reporting lower fourth-quarter income on Tuesday, hurt by declining sales of diabetes and cancer treatments and other prescription drugs.
The French drugmaker, which is in the midst of a reorganisation to address falling sales of its best-selling insulin drug Lantus, said sales of its next-generation insulin treatment Toujeo launched last year doubled in the fourth quarter compared with the previous three months.
Shares in Sanofi were 0.4 percent lower at 69.6 euros at 0856 GMT, off 11 percent this year and down 25 percent since the company said in November its reorganisation would prevent any meaningful profit growth over the next two years.
“Today’s release is negative in our view as Lantus is declining at an accelerated pace. It’s probably done on purpose by Sanofi to make room for Toujeo but this has not delivered growth or profitability so far,” a Paris-based trader said.
Sanofi shocked investors in October when it warned sales at its diabetes division, one of its major revenue and profit drivers, would keep falling until 2018.
In the fourth quarter, revenue from diabetes fell 12.6 percent at constant exchange rates to 1.9 billion euros ($2.1 billion).
“Given this level of decline we expect there to be considerable cost savings in 2016 to keep EPS (earnings per share) flat,” Liberum analysts wrote in a research note.
Sanofi’s fourth-quarter business net income fell 13.5 percent at constant exchange rates to 1.71 billion euros with sales down 1.6 percent to 9.28 billion. Analysts had forecast net income of 1.69 billion euros and sales of 9.34 billion.
Under its reorganisation, Sanofi plans to take out some 1.5 billion euros of costs by 2018 but expects earnings per share to grow faster than sales thereafter.
The company, which adopted a simplified structure centred around five global business divisions last month, is negotiating headcount reductions globally and will provide figures by mid 2016, Chief Executive Olivier Brandicourt told reporters.
In France, Sanofi is considering a voluntary early retirement plan that could lead to about 600 job cuts over three years.
Brandicourt said Sanofi was still exploring options for its generic drugs business in Europe, after it agreed in December to swap its animal health business for Boehringer Ingelheim’s consumer health division.
Last month, Brandicourt told Reuters the company was stepping up its hunt for mergers and acquisitions.
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Reporting by Matthias Blamont and Noelle Mennella; editing by David Clarke