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Sanofi poised for swift Medivation move as earnings drop
[LONDON] Sanofi said it's ready to act swiftly to reach a deal with US biotechnology company Medivation Inc as profit and sales declined, highlighting the need for new medicines to propel growth.
"We have entered this new phase of our discussion with Medivation, which of course we expect will be much more productive,'' Chief Executive Officer Olivier Brandicourt said on a conference call. "There is no certainty in terms of timing but we are ready clearly to move quickly.'' Sanofi's profit fell 8.7 per cent last quarter as cheaper copies dented sales of the best-selling insulin Lantus and two new products had slower-than-expected starts. Medivation would bring the tumor-fighting drug Xtandi as well as two innovative experimental products with the potential to rouse Sanofi's cancer business, which has languished since the former blockbusters Taxotere and Eloxatin faced generic competition.
Sanofi will remain financially disciplined in the latest round of talks with Medivation, Mr Brandicourt said. The San Francisco-based company this month entered into confidentiality agreements with Sanofi and other parties that have expressed interest in a deal.
The French drugmaker will use acquisitions to strengthen its business in key areas including oncology, concentrating on "bolt-on" or mid-sized deals, Mr Brandicourt told analysts in a separate conference call.
"Large M&A today is not part of our agenda," he said.
Sanofi first offered US$9.3 billion, or US$52.50 a share, for Medivation. It upped its offer to US$58 in cash and US$3 in the form of a contingent value right relating to the sales performance of the experimental cancer medicine talazoparib after entering into confidentiality agreements, but Medivation spurnedthe raised bid as well.
The stock fell as much as 3 per cent to 74 euros, the most in five weeks, and traded at 74.97 euros at 3.52 pm Paris time. That takes its loss to about 24 per cent over the past 12 months.
"The quarter was somewhat challenging" because of the currency crisis in Venezuela and the loss of patent protection on the blood thinner Plavix in Japan, according to Brandicourt, who also reiterated the company's full-year forecast.