|Sanofi CEO Chris Viehbacher|
Sanofi ($SNY) CEO Christopher Viehbacher finally got to say the words he's longed to say for a long time: This year, sales and earnings will grow. And the French drugmaker's fourth-quarter results--6.5% sales growth at constant exchange rates, and a reported 16.8% profits increase--allowed him to make that claim based on actual cash-based evidence.
The company ended 2013 with almost €33 billion in net sales, or about $44.7 billion, down 5.7%, mostly on declining currencies in emerging markets, where Sanofi does more than one-fifth of its business. Without the currency effects, sales would have been essentially flat for the year. In Q4, the company racked up €8.46 billion (about $11.46 billion) and delivered €1.8 billion in profits, or €1.37 per share.
"Sanofi's growth profile emerged" in the fourth quarter, Viehbacher said in a statement, adding that the areas Sanofi is targeting for growth--including emerging markets and diabetes--saw sales increase by 10% for the period, to top €6 billion. And new launches are underway.
But one key reason for optimism is this fact: For the first time in several years, Sanofi doesn't lose patent protection on a key drug in 2014. That will ease the drag on revenue from generic products. Last year, not the worst of its patent cliff, generic competition took €1.25 billion ($1.69 billion) off its top line.
It also helps that Lantus, its superstar diabetes treatment, grew by 20% for the year, to a whopping €5.72 billion ($7.75 billion), pushing the entire diabetes franchise up by 18.7%, to €6.6 billion. Genzyme, its U.S.-based biotech business, saw sales grow by more than one-quarter for the year, to surpass €2 billion.
And emerging markets managed to grow 4.4%, to almost €11 billion, despite inventory problems in Brazil and government probes in China. Undeterred by the pharma-specific turmoil--not to mention overall worries about growth in the developing world--Viehbacher expects better in 2014. "People don't stop getting sick because the GDP suddenly has declined," Viehbacher said during today's earnings conference (as quoted by Reuters).
Three of Sanofi's nonpharma businesses--vaccines, animal health, and consumer health--turned in a mixed performance, with the vaccines business flat, animal health down on increased competition, and consumer health up. Sanofi is among the few major drugmakers that haven't announced a "reviewing all options" approach to these sorts of businesses, with Pfizer ($PFE) already selling off units, and Novartis ($NVS) and Merck ($MRK) considering their fate.
Special Report: Top 10 Drugmakers in Emerging Markets - Sanofi