Sanofi ($SNY) CEO Christopher Viehbacher's (photo) theme in a Reuters interview was value. As in, the drug industry has more than markets would suggest. To hear Viehbacher tell it, the drug industry in general, and Sanofi in particular, is trading at bargain-basement prices. Key players have single-digit price-to-earnings ratios, he pointed out.
"You typically have low double-digit PEs for the market and my ambition for Sanofi, and I think for what the industry would be too, is to at least close the discount," he told Reuters. And he came up with a pithy soundbite: "I'd like to have the same P/E as people who make sodas and potato chips." Especially at a time when the United Nations is debating the global spread of chronic, lifestyle-related illnesses such as diabetes.
Of course, the fundamentals of the drug industry are far different from the food business. Pharma's well-known patent cliff, for one thing. Viehbacher says Sanofi's already moving on from its patent-loss problems, even though exclusivity on its top-selling bloodthinner, Plavix, doesn't run out until next year. He sees drugs headed for the cliff as "discontinued business" already, Reuters reports.
Much has been made of Viehbacher's vow to move away from easily copied drugs that make a company vulnerable to future patent losses. It's one reason why Sanofi spent more than $20 billion to buy Genzyme, the U.S. rare disease specialist. Of course, Genzyme and its hard-to-make drugs bring their own problems; just witness its ongoing supply issues. In this interview, Viehbacher again promised that he's aiming to navigate in a new direction. "This is the fourth time I've been through a patent cliff in my career and the objective of this is to avoid a fifth one," he said.
- get the interview from Reuters