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Sanofi sees strong profit growth from 2018, to cut costs

PARIS (Reuters) - Sanofi said investment in products to compensate for declining diabetes sales will prevent significant profit growth in the next two years, adding that earnings would outpace sales from 2018.

The French drugmaker said on Friday that it would slash costs by 1.5 billion euros by 2018 as it aims to remain a diversified healthcare company while many competitors have chosen to specialise in recent years.

Sanofi said it expected six product launches to generate sales of 12 billion to 14 billion euros over the next five years in the hope of compensating for its struggling diabetes business, its main division and profit centre.

"As a result of investments in launches, headwinds in diabetes and the phasing of cost savings, Sanofi does not expect to show any meaningful bottom-line growth over 2016-2017," the company said in a statement.

"Beginning in 2018, however, Sanofi expects to grow business earnings per share faster than sales, reflecting its improved sales mix and the full capture of cost efficiencies."

In a separate announcement, Sanofi said it had entered in a licence agreement in diabetes with U.S. Lexicon Pharmaceuticals, following a deal with Korea's Hanmi Pharmaceutical on Thursday.

(Reporting by Matthias Blamont; Editing by James Regan)