Taking Sanofi's Pulse: What to Expect from Its 4Q15 Earnings
Is Genzyme a driver for Sanofi?
Following its acquisition in 2011, Genzyme became a wholly owned subsidiary of Sanofi (SNY). The contribution from the company for the period was ~9.6% of total Sanofi revenues.
Genzyme focuses on lysosomal storage diseases, renal diseases, orthopedics, transplant and immune diseases, oncology, genetics, and diagnostics. The specialized product portfolio of Genzyme includes Cerezyme, Aubagio, Myozyme, Aldurazyme, Lemtrada, Cerdelga and Fabrazyme. Aldurazyme, a BioMarin (BMRN) product, is globally distributed and marketed by Genzyme.
The graph above portrays revenues along with yearly growth for Genzyme. For 3Q15, Genzyme reported a robust annual growth of ~42% over 3Q14. Over the past five quarters, the company has consistently reported double-digit growth.
Genzyme’s performance during the latest quarter
Genzyme has portfolio distributed over two broad categories: rare diseases and multiple sclerosis, or MS. Revenues recorded by Genzyme for 3Q15 were 923 million euros. The contribution to that from the rare diseases category was ~68%. Cerezyme, a major rare disease product according to sales, fetched 189 million euros. Other companies operating in the rare diseases segment are Alexion Pharmaceuticals (ALXN), Shire (SHPG), and bluebird bio (BLUE).
Strong sales for MS drugs supported the performance of the company. On a constant-exchange-rate basis, revenues from MS drugs increased by ~120% over the same quarter of the previous year. MS drug Aubagio proved to be Genzyme’s largest product by sales, fetching 225 million euros for the period.
Genzyme experienced a 40.2% increase in its US sales for the period, and there was double-digit growth, 29.5%, in Western Europe. Emerging market sales were up by 27.7% for the period.
To get exposure to Sanofi and avoid excessive company-specific risks, investors could choose to invest in the Market Vectors Pharmaceutical ETF (PPH). Sanofi accounts for 5.2% of PPH’s total holdings.
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