Sanofi Projects Growth Despite Challenges

Sep. 9.11 | About: Sanofi (SNY)

By Michael Fitzhugh

Sanofi (NYSE:SNY) says it expects to grow sales by an average 5 percent each year between 2012 and 2015, even as profits from blockbusters like the blood-thinner Plavix and the blood-pressure medication Avapro are hurt by patent expirations.

To compensate, the French company says it is looking to find new profits in six key growth platforms: Human vaccines, diabetes solutions, consumer healthcare, innovative products, animal health, and emerging markets, regions that it expects will account for 38 percent to 40 percent of its sales by 2015.

Sanofi needs new revenue sources. It spent $32.1 billion in 23 acquisitions since January 2009, the bulk of that on its $20.1 billion purchase of Genzyme in April. It also estimates that sales of key drugs in its portfolio facing generic competition will decline to about $4.3 billion in 2011, versus $11 billion in 2008.

Much of the new revenue is expected to come from 19 potential project launches in the company’s pipeline. Six of those projects are expected to yield new drugs ready for filing between July 2011 and March 2012, the company says. But Sanofi also will realize a stronger financial footing through new cost-cutting measures and synergies with Genzyme, which it expects will generate savings of $2.9 billion by 2015.

Sanofi CEO Chris Viehbacher calls next several years “a period of consistent and sustainable growth,” and gave shareholders one more reason to invest in his vision for the company’s future: As the company moves beyond the patent cliff, he says, dividends will rise.