Sanofi’s CEO Says Drug Portfolio Is Underrated- TOT, SNY
Northern, WI 1/28/2013 (avauncer) – According to CEO Chris Viehbacher, investors are still wary of the drugs that are being experimented on by the French company, Sanofi (EPA:SNA). The company’s depository receipts trade at the New York Stock Exchange as Sanofi SA (ADR) (NYSE:SNY).
The company is worth €96.4 billion ($129.8 billion) after its stock gained 31% in the past year in the Paris exchange. This made it the largest company by value in France beating Total SA (EPA:FP) which trades at the NYSE as Total S.A. (ADR) (NYSE:TOT).
Viehbacher added that the people have begun to realize the potential of the diversified pattern of the company but the future is in making new discoveries and new products which are quite underestimated as yet.
Vierbacher has been instrumental in boosting and adjusting Sanofi (EPA:SNA)’s Research & Development by getting rid of less hopeful projects and concentrating more on mergers and acquisitions. The Paris-based company is in dire need of new products to boost sagging sales due to stiff competition for its best medications such as the Plavix blood thinner.
Vierbacher turned the company a lot more profitable in the last 3 years. Since he joined Sanofi (EPA:SNA) 3 years back,the company had a price-earnings ratio of only 8.2 times and today the figure stands at 11.7 times which is just a little less that the average of 12.7 of the other big drug manufacturers of the world.Vierbacher is of the opinion that the company is still valuable and its shares can go up further.
Some of the drugs that are to be released into the market soon are Aubagio, a drug to counter multiple sclerosis, Zaltrap for cancer treatment and Lyxumia for diabetes patients. Vierbacher is also excited about a revolutionary vaccine against dengue and another medicine for lowering cholesterol.
The company is constantly on the lookout for new acquisition opportunities but doesn’t want to burn its fingers in an over-valued company. It said that it was targeting acquiring companies in the range of €1 billion to €2 billion. The company does not let any opportunity pass by without evaluating it.
The French company has a good record of doing acquisitions competently just as it had been successful in the amalgamation of Genzyme Corp., it acquired in 2011 for $20.1 billion.
According to Vierbacher, all drug companies are cash-rich and wholly valued and he is only looking out for undervalued acquisitions.If Sanofi (EPA:SNA) does not manage to find a good deal for an acquisition, then it will return all the cash to shareholders as dividends.
There is one company which has caught its eye and that is the eye-care company, Bausch & Lomb Inc. But Vierbacher did not comment on the unconfirmed interest in the company although he did comment that ophthalmology is growing in importance as the population ages. Eyesight is an important aspect for a quality life and eye diseases, known and new, are becoming more rampant. But from the acquisition point of view, the field and the company have to be studied for its intrinsic value.
Sanofi SA (ADR) (NYSE:SNY) shares were up 1.61% to $49.28. Total S.A. (ADR) (NYSE:TOT) shares were up 1.02% to close at $53.51.