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Drugmaker Sanofi in no hurry for deals as signals stable 2017
February 8, 2017 / 8:56 AM / 10 months ago

Drugmaker Sanofi in no hurry for deals as signals stable 2017

PARIS (Reuters) - France’s biggest drugmaker, Sanofi (SASY.PA), which missed out to Johnson & Johnson (JNJ.N) on buying Actelion ATLN.S last month, said it was no rush to do deals as it forecast stable or slightly lower 2017 earnings.

FILE PHOTO: The logo of French drugmaker Sanofi is seen in front of the company's headquarters in Paris, France, March 8, 2016. REUTERS/Philippe Wojazer/File Photo

Sanofi’s fourth-quarter results were hit by higher taxes and one-off charges, although its shares rose on Wednesday as analysts were encouraged by a better-than-forecast performance at the company’s vaccines and Lantus insulin division.

The group had already warned investors in 2015 not to expect any ‘meaningful’ profit growth for two years because of a downturn in its embattled diabetes division.

“In 2017 and beyond we will continue to simplify and reshape the company,” Chief Executive Olivier Brandicourt told journalists. “We will be supported by our current growth engine businesses: Sanofi Genzyme, vaccines and consumer healthcare.”

Under pressure from investors to land a significant acquisition that would help Sanofi resist a tough pricing environment in the United States, the world’s largest health market, Brandicourt said Sanofi was “not in a hurry to do M&A.”

U.S. healthcare giant Johnson & Johnson said last month it would buy Swiss biotech company Actelion in a $30 billion all-cash deal, edging out Sanofi.

The French group, which was also beaten in August by a $14 billion bid for cancer specialist Medivation from Pfizer (PFE.N), repeated it would be strict in its approach to deals.

“The only principle we will follow is to create value for shareholders and always consider the strategic fit,” Brandicourt said.

Sanofi shares were up 2.6 percent in early trading, outperforming a 0.2 percent rise on France's CAC .FCHI index and a 0.4 percent advance on the STOXX Europe 600 Healthcare index .SXDP.

    Deutsche Bank kept a “buy” rating on Sanofi shares, while Jefferies maintained a “hold” rating.

    Sanofi said its fourth-quarter business net income fell 2.9 percent at constant exchange rates to 1.61 billion euros ($1.7 billion). Total sales rose 3.4 percent to 8.87 billion euros.

    Analysts polled by Reuters in partnership with Inquiry Financial had on average expected business net profit of 1.57 billion euros and net sales of 8.94 billion.

    Sanofi said its fourth-quarter effective tax rate had reached 24 pct compared with 17.4 pct in 2015.

    ($1 = 0.9367 euros)

    Additional reporting by Matthieu Protard; Editing by Louise Heavens and Alexander Smith

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