Sanofi reported 4Q17 sales growth of -1.6%, impacted by the Dengue vaccine issue in the Philippine and continued pressure in its Diabetes franchise in the US. As a consequence, Business EPS declined ~9%. Sanofi has been more successful recently in its M&A strategy, which should bring back some growth to the business in the coming years. Price target and position size unchanged. Continue reading “Sanofi reported disappointing sales and EPS growth in 4Q17, recent deals integration will be key”
Tag: sny
Sanofi announces another deal (Ablynx)
Sanofi announced this morning the acquisition of Ablynx:
• Ablynx is a Belgian antibody biotech company that has multiple compounds in the works:
o Compound targeting a rare blood disorder (aTTP) that has completed phase III testing and pending European & US regulatory approval for commercialization (fit with rare disease & Bioverativ)
o compound to treat RSV infections in phase II (fits with Sanofi’s vaccine portfolio)
o early stage antibody technology platform (adding to Sanofi’s R&D efforts)
• Close of the 3.9B euros ($4.8B) all cash acquisition of Ablynx expected fairly soon, in 2Q18
• The deal will be financed by bank credit and was approved by both boards
• Deal neutral to earnings in 2018 & 2019, then low-single-digits accretive thereafter
This is not changing our view of the stock, as any incremental future sales coming from those new drugs are offset by the cost of the deals near term. As a reminder, Sanofi was outbid by Pfizer on the Medivation deal, and by JNJ on Actelion. So far 2018 is starting to be a big M&A year for Sanofi
Sanofi Bioverativ Deal
Sanofi / Bioverativ overview
Bioverativ (BIVV):
• Spun off Biogen in 2017. Only pure player in the hemophilia drug market
• Had sales of $847M + $41M in royalties in 2016, guided to grow 30% in 2017
• 39% EBITDA margin in 2016 (43.4% estimated EBITDA margin for 2017)
• Pipeline of drugs targets every modality in hemophilia and other blood diseases
• The drugs are currently sold in the US, Canada, Japan and Australia