Sanofi ($SNY) CEO Christopher Viehbacher wants you to look past this quarter to better times ahead. "We are seeing the light at the end of the tunnel," Viehbacher told the media, after announcing that third-quarter profits weren't as low as expected (as quoted by Reuters). Net income dropped 7.4% to €2.22 billion ($2.9 billion), when analysts had projected, on average, €1.97 billion ($2.55 billion).
Extending the less-bad theme, Sanofi changed its full-year forecast by 3 percentage points. It's no longer expecting a 15% drop in earnings, but a 12% decline. "As our growth platforms continue to build steam, we believe this will put Sanofi back on a growth trajectory," Viehbacher said.
Analysts appear to agree. Bernstein's Tim Anderson said the French drugmaker "should be capable of returning to very consistent revenue and EPS growth over the long term, which makes it unique among its peers."
So what are those growth platforms? Diabetes and rare diseases, apparently. Lantus, the diabetes behemoth, grew by 20.7% to almost €1.3 billion ($1.68 billion). Genzyme, the U.S. biotech unit Sanofi bought last year, delivered 22.5% sales growth, thanks to recovery in Fabrazyme supplies. Emerging markets also helped, growing by 6.8% to €2.8 billion ($3.63 billion).
The drag, of course, was generic erosion. Plavix, the megablockbuster blood thinner, lost U.S. exclusivity earlier this year, as did the Avapro blood pressure franchise. All together, that amounted to a €469 million ($607 million) hit to net income. Multaq, the atrial fibrillation remedy, continued its disappointing trend with a 9.1% decline. This year "represents the trough year for Sanofi's earnings," Societe Generale figures. Apparently, Viehbacher would agree.