Oct 28, 2014 6:18 AM
Sanofi shares plunge after diabetes drug warning
The Associated Press
PARIS (AP) French drug maker Sanofi saw its stock price plunge Tuesday after it reported a slide in quarterly earnings and warned of pricing pressure on its blockbuster diabetes treatment in the U.S.
Sanofi shares fell 8.4 percent to 76.39 euros, forfeiting gains in the run-up to the announcement.
Net profit slipped 2.4 percent in the third quarter as the maker of the Lantus diabetes treatment booked a higher charge for restructuring at its French operations.
The drugmaker reported net profit of 1.19 billion euros ($1.5 billion) in the third quarter, down from 1.22 billion euros a year earlier. The latest quarter included 163 million euros in restructuring costs.
In a statement, Chief Executive Christopher Viehbacher said pricing pressure on its Lantus diabetes treatment in the key U.S. market would continue to hamper sales growth into 2015. Sales of Lantus and other diabetes treatments grew 8.3 percent at constant exchange rates in the quarter, a marked slowdown from previous quarters' double-digit growth.
Sanofi said growth in Asia, Latin America and the United States helped lift overall sales 4.1 percent to 8.78 billion euros in the quarter, and the company confirmed its target of annual earnings growth of between six and eight percent.
Sanofi shares have more than doubled during Viehbacher's nearly six years at the helm, as he cut costs and shifted the company's focus to biotechnology, over-the-counter medications, animal health and vaccines. He bought U.S. biotech firm Genzyme for more than $20 billion in 2011 and has more recently sought to offload a portfolio of older off-patent drugs with falling sales.
Some French newspapers have speculated recently of a rift between Viehbacher and other members of the company's board over the company's strategy, but the company denied that his replacement was on the agenda of this week's board meeting.