Sanofi Says Net Profit Up 26 Percent
Drug Maker Sanofi Says Net Profit Up 26 Percent
PARIS (AP) — Drug maker Sanofi said Thursday that its net profit grew 26 percent in the third quarter, marking the start of a turnaround after several quarters of poor sales as the patents for valuable drugs expired.
The company reported a net profit of €2 billion ($2.8 billion), up from €1.6 billion from the same period last year.
Sanofi has been aggressively cutting costs in recent months — it announced another round of layoffs Wednesday — as it tried to return to profitability during a period where several blockbuster drugs have gone off patent, decimating sales.
In the July-September period, the company's sales grew 5 percent to €8.8 billion, though much of that was due to a consolidation of sales from its recent acquisition of U.S. biotechnology firm Genzyme.
CEO Christopher A. Viehbacher said the company is also making strides in developing new drugs, including recently submitting five more for approval.
"The return to growth in sales and earnings in the third quarter reflects an important milestone as the company progressively puts the patent cliff behind it," Viehbacher said.
While he was positive about several new drugs the company has in the pipeline — including ones for the treatment of diabetes and multiple sclerosis — he noted that it takes several months for new drugs to come on the market and the company will still see more patents expire in the coming years.
"We're still struggling from generic competition," he said.
While the third quarter marked the first growth in net profit since last year, by the company's own preferred measure, it still has some work to do. Its "business net profit" — net profit minus restructuring costs, certain taxes, some impact of acquisitions as well as other factors — shrank 3 percent.
Posted: November 2011