Tuesday, December 10, 2013

Sanofi Continues to Struggle on Its Path to Recovery

By Sarfaraz A. Khan and Gohar Yousuf
One of the world’s leading pharmaceutical companies, Sanofi (SNY), has recently received a setback when the U.S. regulators raised serious questions over one of its new drugs. This was a small addition to Sanofi’s long list of woes. The firm has reported declining profits for five consecutive quarters. In its most recent quarterly results, the company missed both top and bottom line estimates. Like some of the other pharmaceutical giants, Sanofi has struggled with growth following the loss of patents on some of its blockbuster drugs, such as Plavix. The business has failed to come up with newer drugs that could offset the losses coming from patent expiration. Therefore, it wasn’t surprising when Warren Buffet’s Berkshire Hathaway (BRK.A) (BRK.B) decided to sell the shares of Sanofi and its European peer GlaxoSmithKline (GSK). 

Question Marks over Lamtrada

Sanofi has been working on the development of its multiple sclerosis treatment drug, Lamtrada. The drug became a part of Sanofi’s pipeline when it acquired the biotech firm Genzyme for $20 billion last year. The dryg’s future prospects played an important part in the determination of Genzyme’s price tag. However, its efforts received a serious setback when earlier this month, the U.S. regulators raised serious concerns saying that the drug has "serious and potentially fatal safety issues." Drug still has some chances of approval if it is proved that it delivers substantial benefits to patients that outweigh the risks. The final decision will be taken by the  ... read full article at GuruFocus