As the year comes to a close, Sanofi (NASDAQ:SNY) has a holiday gift for investors in the form of a new strategy. The French drugmaker announced a $2.5 billion biotech takeover in the growing immuno-oncology field earlier this week, then a day later said it is dropping research in the diabetes and cardiovascular fields. This is big news because Sanofi's top-selling drug is diabetes drug Lantus. The problem is that with pricing pressure from competitors, Lantus' sales have been sliding -- and fast.
IMAGE SOURCE: GETTY IMAGES.
Lantus brought in more than $1.2 billion in the third quarter of 2017, and by the same period last year, the figure dropped to less than $1 billion. Sanofi reported a 17.5% decline in Lantus sales to $837 million in the third quarter of this year. To make matters worse, the rest of the diabetes and cardiovascular business has followed, weighing down earnings, while areas including oncology and immunology grew.
That's why the stock market applauded new Chief Executive Officer Paul Hudson's plan to refocus the business. Sanofi shares gained 6.2% on Tuesday after Hudson's comments.
Hudson, in his quest to focus on products and areas that are growing, targets $11 billion in sales for eczema treatment Dupixent. Sales of the drug soared 142% in the third quarter to reach $635 million. The company also will prioritize the development of six innovative investigational products in the areas of hemophilia, lysosomal storage disorders, respiratory syncytial virus, breast cancer, and multiple sclerosis.
Halting research in diabetes and cardiovascular, along with other efforts, is meant to help Sanofi reach $2.2 billion in savings by 2022. In other financial news, the company plans on expanding its business operating income margin to 30% by that year and to 32% by 2025. Business operating income is a non-GAAP measure of financial performance in which Sanofi eliminates elements such as acquisition-related effects and adds items like share of profits or losses from certain investments. The company also aims to increase annual free cash flow 50% by 2022.
Sanofi is reorganizing its operations into three business units: specialty care, vaccines, and general medicine. Consumer healthcare, which includes products like over-the-counter painkillers, will be a stand-alone business with its own R&D and manufacturing processes. Reutersreported that Sanofi might sell the unit or look for a joint venture. Consumer healthcare generated $5.2 billion in sales for Sanofi in 2018, a 3% increase from the previous year. That was about half of the figure generated by the specialty care unit, which grew 29% year over year.
Sanofi said cash from its businesses will be spent on further investment internally, acquisitions, and -- good news here, investors -- increasing the annual dividend. The last payment, in May, was $3.42, increasing for the 25th straight year.
Considering all of the good news, Sanofi isn't looking expensive. According to Zacks research, it trades at 14.16 times earnings, slightly cheaper than the large-cap pharmaceutical industry average of 14.85. The stock has gained 17% so far this year to about $49, but Wall Street predicts at least a bit more upside, with the average analyst price target at $52. Investors should also bear in mind that analysts might adjust their estimates and outlooks in the wake of Hudson's presentation.
With total net sales down 1.1% in the third quarter and the former big businesses of diabetes and cardiovascular slowing, Sanofi didn't present the best investment case a few weeks ago. This week's news, however, changed the landscape. The company is acquiring immuno-oncology company Synthorx (NASDAQ:THOR) to boost a part of its own business that is growing. It is halting the spending on struggling units and reallocating resources to stronger ones. And it continues to think of investors with the goal of boosting dividends.
For those looking to add to pharmaceutical holdings, Sanofi looks like a promising candidate going into 2020 and beyond.
Original post:
Sanofi Says Its $2.5 Billion Biotech Takeover Is Just the Beginning - The Motley Fool
- Eczema: Read About Symptoms and Medications - October 15th, 2014 [October 15th, 2014]
- Dermatitis - Wikipedia, the free encyclopedia - October 15th, 2014 [October 15th, 2014]
- Eczema and Your Skin | Eczema Types, Symptoms, Causes, and ... - October 15th, 2014 [October 15th, 2014]
- Kangen Water Testimony - Eczema, Weight Loss, Headaches - Video - October 15th, 2014 [October 15th, 2014]
- Controlling eczema - Video - October 17th, 2014 [October 17th, 2014]
- Eczema update! - When To Seek Medical Attention - Video - October 18th, 2014 [October 18th, 2014]
- My Makeup Routine For Eczema & Psoriasis - Video - October 18th, 2014 [October 18th, 2014]
- Dyson launches humidifier to combat eczema and psoriasis - October 20th, 2014 [October 20th, 2014]
- Sanofi, Regeneron Begin Phase 3 Study For Eczema Drug Dupilumab - October 20th, 2014 [October 20th, 2014]
- Ayurvedic treatment for Atopic Eczema - Video - October 20th, 2014 [October 20th, 2014]
- How To Treating Eczema at Home? EASY! Find it On This Video - Video - October 20th, 2014 [October 20th, 2014]
- Topical BioMedics Announces "Soothe the Skin They're in," a New Program for Children Who Suffer with Eczema - October 21st, 2014 [October 21st, 2014]
- Vitamin D Might Help Kids With Eczema - October 21st, 2014 [October 21st, 2014]
- Edguard tube cream for acne, eczema, scars and pregnancy blemishes - Video - October 21st, 2014 [October 21st, 2014]
- Cara Veldman #1848200 Eczema Cream - Video - October 21st, 2014 [October 21st, 2014]
- Tampa dermatologists clinical trial for sufferers of eczema ongoing - October 23rd, 2014 [October 23rd, 2014]
- Eczema - A recurrent rash everyone complains about - October 23rd, 2014 [October 23rd, 2014]
- My Essentials for Dry Skin & Eczema - Video - October 23rd, 2014 [October 23rd, 2014]
- Taking a 'Selfie' May Help With Dermatology Care, Study Shows - October 24th, 2014 [October 24th, 2014]
- EP.2 Cures Thermales : Business ou Sant ? - EczemaHelp - Video - October 24th, 2014 [October 24th, 2014]
- EP.1 Cures Thermales : Business ou Sant ? - EczemaHelp - Video - October 24th, 2014 [October 24th, 2014]
- Home remedy for eczema - Beat eczema - Video - October 24th, 2014 [October 24th, 2014]
- Trailer - EczemaHelp - Video - October 24th, 2014 [October 24th, 2014]
- Family First: Calming the symptoms of severe eczema - October 25th, 2014 [October 25th, 2014]
- what causes eczema - Eczema Free Providing ... - October 27th, 2014 [October 27th, 2014]
- Atopic eczema - Treatment - NHS Choices - Your health ... - October 27th, 2014 [October 27th, 2014]
- Atopic dermatitis - Wikipedia, the free encyclopedia - October 27th, 2014 [October 27th, 2014]
- Atopic eczema - NHS Choices - October 27th, 2014 [October 27th, 2014]
- Eczema Treatment Options : How To Cure Eczema & Home Remedies For Eczema - Video - October 27th, 2014 [October 27th, 2014]
- Chamomile: A herbal medicine of the past with bright future - October 29th, 2014 [October 29th, 2014]
- How SELFIES can help cure skin conditions - October 30th, 2014 [October 30th, 2014]
- Eczema linked to bone fractures, injuries in new Northwestern study - October 30th, 2014 [October 30th, 2014]
- Adult eczema may be unrecognized risk factor for fracture, other injuries - October 30th, 2014 [October 30th, 2014]
- Mom Tips: Relief for Baby Eczema - Video - October 30th, 2014 [October 30th, 2014]
- BEST BABY ECZEMA PRODUCTS - Video - October 30th, 2014 [October 30th, 2014]
- Eczema Tied to Bone Fracture Risk in Study - October 30th, 2014 [October 30th, 2014]
- Accident prone eczema patients - October 30th, 2014 [October 30th, 2014]
- Eczema girl's agony is over thanks to allergen-busting extra washing machine rinse cycles - November 1st, 2014 [November 1st, 2014]
- Helping Healing Eva's Eczema with Applied Kinesiology - Video - November 1st, 2014 [November 1st, 2014]
- Eczema May Increase Risk of Injury - Video - November 1st, 2014 [November 1st, 2014]
- treatmyeczema - November 2nd, 2014 [November 2nd, 2014]
- My Eczema Care Routine March 2014 | ... ... - November 2nd, 2014 [November 2nd, 2014]
- The Psoriasis Eczema Skin Puzzle #42 - Video - November 3rd, 2014 [November 3rd, 2014]
- Can some patients' bodies become 'addicted' to topical steroids? - November 5th, 2014 [November 5th, 2014]
- How To Treat Eczema Naturally Review DO NATURAL REMEDIES REALLY WORK - Video - November 5th, 2014 [November 5th, 2014]
- I Will Beat Anyone I Find Eczema On His/Her Body - Video - November 5th, 2014 [November 5th, 2014]
- Proper amount of bathing and moisturizing your baby may help prevent skin disease - November 8th, 2014 [November 8th, 2014]
- How to get rid of super dry skin psoriasis, eczema and more! - Video - November 12th, 2014 [November 12th, 2014]
- Easy Homemade Remedy For Eczema - Pulse Daily - Video - November 13th, 2014 [November 13th, 2014]
- Aveeno Eczema Therapy Moisturizing Cream - Video - November 15th, 2014 [November 15th, 2014]
- aveeno eczema moisturizing cream | Sample Promo - Video - November 16th, 2014 [November 16th, 2014]
- Psoriasis & Eczema : Rain soul by Johnny - Video - November 16th, 2014 [November 16th, 2014]
- aveeno baby eczema therapy moisturising cream | Sample Promo - Video - November 17th, 2014 [November 17th, 2014]
- aveeno baby eczema therapy reviews | Sample Promo - Video - November 18th, 2014 [November 18th, 2014]
- Peanut in household dust linked to peanut allergies, especially for children with eczema - November 19th, 2014 [November 19th, 2014]
- Peanut in household dust linked to peanut allergy in children with eczema during infancy - November 19th, 2014 [November 19th, 2014]
- 10 Tips to Manage Psoriasis and Eczema this Winter - November 19th, 2014 [November 19th, 2014]
- Tampa dermatologist excited over eczema clinical trial results - November 20th, 2014 [November 20th, 2014]
- aveeno baby eczema moisturizing cream | Sample Promo - Video - November 20th, 2014 [November 20th, 2014]
- Why I am sharing my eczema journey and what I deal with everyday living with eczema - Video - November 20th, 2014 [November 20th, 2014]
- Cetaphil Restoraderm Restoring Formulated Eczema - Video - November 20th, 2014 [November 20th, 2014]
- Cetaphil Restoraderm Restoring Moisturizer 10 Fluid - Video - November 20th, 2014 [November 20th, 2014]
- Childhood Eczema Cure With Kangen Water - Testimonial - Video - November 22nd, 2014 [November 22nd, 2014]
- Natural Remedies for Eczema - The Best Eczema Treatment - Video - November 23rd, 2014 [November 23rd, 2014]
- Eczema in Kids - Read More About It - Video - November 23rd, 2014 [November 23rd, 2014]
- Hypoallergenic labels may not be accurate - November 23rd, 2014 [November 23rd, 2014]
- Danielle Sheehan's life transformed after Botox eradicates her eczema - November 25th, 2014 [November 25th, 2014]
- Eczema's effects can be bone-deep - November 25th, 2014 [November 25th, 2014]
- New recommendations for treating kids with eczema - November 25th, 2014 [November 25th, 2014]
- Eczema cases rising among U.S. children - November 25th, 2014 [November 25th, 2014]
- Eczema Cases Rising Among U.S. Children: Report - November 25th, 2014 [November 25th, 2014]
- New guidelines released for treating kids with eczema - Video - November 25th, 2014 [November 25th, 2014]
- TCM Recipe Natural Herbal Eczema Cream Review - Video - November 25th, 2014 [November 25th, 2014]
- New product to heal eczema to use topically and progress pictures - Video - November 25th, 2014 [November 25th, 2014]
- 15 Proven Natural Cures for Eczema - Baby dermatitis: how ... - November 26th, 2014 [November 26th, 2014]
- Aveeno Moisturizing Bar - Aveeno Eczema Therapy Moisturizing Cream - Video - November 26th, 2014 [November 26th, 2014]
- How to psychologically & physically confront eczema in you. - Video - November 26th, 2014 [November 26th, 2014]
- Woman, 21, left looking sunburnt by severe eczema finally has the perfect complexion - thanks to a 'magical' cream - November 27th, 2014 [November 27th, 2014]
- Aveeno Baby Sunscreen - Aveeno Baby Coupons - Aveeno Baby Eczema - Video - November 27th, 2014 [November 27th, 2014]
- How I cured my eczema in just over 10 days and you can to. My personal review - Video - November 28th, 2014 [November 28th, 2014]