Steven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch's economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.
Shares of French drugmaker Sanofi fell as much as 16% on Friday after after hiking its research-and-development expense guidance as well as its expectations for taxes.
The company unveiled what it called the “next chapter of play to win strategy,” and investors were dismayed. What it calls “business EPS” is forecast to fall by low single digits next year, hurt both by rising R&D costs as well as changes to global tax rules that will take its rate to 21% next year from 19%.Sanofi SAN, -15.45% SNY, +0.
“In this new chapter of our strategy, we are deepening our investment in R&D, taking steps toward becoming a pure play biopharma company, and further optimizing our cost structure. This will help us accelerate innovation and strengthen our growth drivers, while ensuring long-term profitability and enhancing shareholder value,” said CEO Paul Hudson.
Third-quarter results weren’t too far from consensus. Sanofi’s adjusted earnings per share fell 11.5% to €2.55, compared to analyst estimates of €2.61, as revenue fell by 4.1% to €11.96 billion , vs. the consensus of €12.1 billion. “Our early take on these strategic actions is that the separation of is the right thing to do strategically, but we are expecting a negative reaction in shares today on the 2024 and 2025 numbers cuts,” said Barclays analysts led by Emily Field.
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