Sanofi (NYSE:SNY) stock fell about 15% overnight after it predicted slower profit growth next year.
The French drug company also said it will follow rivals and .
Sanofi earned 2,525 billion euros, 2.55 euros per share, on revenue of 11.96 billion euros ($12.63 billion). Analysts had been expecting a net income of 2.61 euros on revenue of 12.1 billion euros. It was the company’s as the earnings release called it, that sent the stock down.
Sanofi said higher research costs and taxes will mean next year’s profit will be up in the low single digits. The company missed earnings estimates by over 40% in each of its previous three quarters.
Sanofi was due to open in New York at $44.90 per share, a market capitalization of about $110 billion.
The Spinoff Game
Most other drug makers, including Pfizer (NYSE:PFE) and Johnson & Johnson (NYSE:JNJ), have already done spinoffs on their consumer businesses. JNJ did it just this year, creating Kenvue (NYSE:KVUE), already down 30% since its May launch. Consumer health delivers steady revenue but lower profits than patented drugs.
As part of its planned spinoff, Sanofi . “There’s a lot to digest here,” said a Barclays analyst, noting that Sanofi’s research has not been productive in recent years.
Sanofi’s are , an injection for asthma, eczema and other allergic diseases, and , a form of long-acting insulin for diabetes. Regeneron (NASDAQ:REGN) is its partner on Dupixent and recently had a successful test of that drug on
Sanofi consumer products include the skin creams Aspercreme and Capzasin, along with Rolaids . The separation should happen in the fourth quarter of 2024, Sanofi said.
Sanofi’s news sent the entire French stock market down, the this morning.
SNY Stock: What Happens Now
Sentiment about SNY stock on Stocktwits was already before the latest news, which confirmed investors’ fears. The tone of the press release, which failed to acknowledge the company’s weaknesses, didn’t help.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
