Sanofi's second-quarter chatter is all about Genzyme. Earnings forecasts are up, for instance, thanks to the inclusion of Genzyme numbers for the first time. Troublesome generics competition for some of the French drugmaker's big sellers--think Taxotere, the cancer drug--was brushed off by some analysts who expect Genzyme to help insulate Sanofi from future threats.
What's more, Sanofi ($SNY) crowed about the fact that key Genzyme executives have decided to stick around, rather than exiting stage left after the Genzyme deal closed in April. "The level of employee turnover has not changed significantly following the acquisition," CEO Chris Viehbacher said on a conference call (as quoted by Bloomberg). Viehbacher pointed specifically to Genzyme's global quality chief, who's committed to staying and "has played an extraordinarily important role."
But the Genzyme talk wasn't all positive. Sanofi said it expects to squeeze $700 million in costs from the combined company by 2013, a number that failed to impress Helvea analyst Karl Heinz Koch, who was expecting $1 billion. The shortage of Genzyme's Fabry disease drug Fabrazyme is expected to extend into the first quarter of 2012. That means the Boston-based unit will miss a production target that would have triggered milestone payments to investors.
Plus, Genzyme may have helped boost profit expectations, but sales were flat as Sanofi drugs suffered from generic rivals. Even Viehbacher acknowledged that the numbers weren't super impressive. He reminded analysts that 2011 has always been expected to be tough for the company: "This year will be the most challenging year in terms of sales affected by patent expiries," he said (as quoted by Reuters). And those expiring patents were what prompted Sanofi's approach to Genzyme--and its harder-to-copy rare-disease drugs--in the first place.