Back to Main

Sanofi Expresses Optimistic Earnings Outlook After Genzyme Acquisition

By: Kapitall
Posted: 9/9/2011 9:53:00 PM
Referenced Stocks: ABT;AZN;BMY;GSK;JNJ;LLY;MRK;NVS;PFE;SNY

(By Alexander Crawford. Data sourced from Finviz.)

Like many large drugmakers today, France’s Sanofi (SNY) is adapting to a patent cliff that has been taking a heavy swipe at its revenue. The company has just set out a strategy that they believe will raise earnings by 5% annually over the next four years – and trim costs by $2.8 billion.

According to Bloomberg, these forecasts are Sanofi’s first to include their $20.1 billion acquisition of Genzyme Corp. (GENZ) earlier this year. “The cost cuts will come from the integration of Genzyme, which will contribute $700 million, as well as “new initiatives” (via Bloomberg).

“The focus has shifted to 2015 as people try to gain a perspective on the dynamic of the company,” Sanofi CEO Chris Viehbacher said on a conference call with reporters. “We are essentially pointing out a new investment thesis. It is first and foremost based on a return to growth for Sanofi following the patent cliff.”

Sanofi is presenting six new medicines to regulators between July and next March, and as many as nineteen new drugs by 2015, according to the company’s statement.

The acquisition of Genzyme, arguably the first biotech company and today’s largest maker of medicines for rare genetic disorders, was designed to provide Sanofi with access to treatments that are less vulnerable to generic competition.

The company said last month that generic versions of Sanofi drugs (such as the Lovenox and Plavix blood thinners) cut 778 million euros from second quarter sales.

Do you think that Sanofi will continue to grow despite generic competition? Here we report some interesting data on the largest drugmakers, including Sanofi, traded in the US.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

List sorted by market cap.

1. Johnson & Johnson (JNJ): Engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Market cap of $179.30B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.48%, current ratio at 2.51, and quick ratio at 2.2. The stock has gained 15.15% over the last year.

2. Pfizer Inc. (PFE): Offers prescription medicines for humans and animals worldwide. Market cap of $148.32B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.21%, current ratio at 1.98, and quick ratio at 1.7. The stock has had a good month, gaining 14.11%.

3. Novartis AG (NVS): Engages in the research, development, manufacture, and marketing of healthcare products worldwide. Market cap of $130.60B. The stock has gained 11.19% over the last year.

4. GlaxoSmithKline plc (GSK): Engages in the discovery, development, manufacture, and marketing of pharmaceutical products, over the counter (OTC) medicines, and health-related consumer products worldwide. Market cap of $107.18B. The stock has gained 13.86% over the last year.

5. Merck & Co. Inc. (MRK): Provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Market cap of $101.54B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.61%, current ratio at 2.05, and quick ratio at 1.66. The stock has had a good month, gaining 10.09%.

6. Sanofi-Aventis (SNY): Engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. Market cap of $95.54B. 0The stock has gained 22.7% over the last year.

7. Abbott Laboratories (ABT): Engages in the discovery, development, manufacture, and sale of health care products worldwide. Market cap of $81.41B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.67%, current ratio at 1.52, and quick ratio at 1.3. The stock has gained 7.46% over the last year.

8. AstraZeneca PLC (AZN): Develops, and commercializes prescription medicines for cardiovascular, gastrointestinal, infection, neuroscience, oncology, and respiratory and inflammation diseases worldwide. Market cap of $61.60B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 5.89%, current ratio at 1.47, and quick ratio at 1.35. The stock has had a good month, gaining 10.32%.

9. Bristol-Myers Squibb Company (BMY): Develops, and delivers innovative medicines that help patients prevail over serious diseases. Market cap of $51.02B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.41%, current ratio at 1.99, and quick ratio at 1.79. The stock has had a good month, gaining 13.38%.

10. Eli Lilly & Co. (LLY): Develops, manufactures, and sells pharmaceutical products worldwide. Market cap of $42.77B. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 5.31%, current ratio at 1.73, and quick ratio at 1.4. The stock has gained 12.08% over the last year.