By Ben Hirschler
DAVOS, Switzerland (Reuters) - Buying back L'Oreal's (OR.PA) 9 percent stake in Sanofi (SAN.PA) could be "very accretive" for the French drugmaker, although the idea remains speculative as the $12 billion holding has yet to be put up for sale, Sanofi's CEO said.
Investor attention has focused increasingly on a potential realignment of shareholdings that may see Sanofi making a debt-funded repurchase of L'Oreal's stake in a move analysts believe should boost the pharmaceutical group's earnings.
Such a deal could provide Sanofi with a useful lift as it seeks to return to growth after a difficult 2013 that featured problems in Brazil and several product setbacks.
"If you get the chance you are certainly going to look seriously at it - but it is an 'if, if, if' situation," Sanofi Chief Executive Chris Viehbacher told Reuters on Friday on the sidelines of the World Economic Forum in Davos, Switzerland.
"It could very well be, when you get there, that it could be a very accretive thing to do."
L'Oreal's CEO Jean-Paul Agon said last year the cosmetics company could buy back the 29.5 percent stake that Swiss food group Nestle (NESN.VX) holds in it, if L'Oreal in turn sells the 9-billion-euro ($12 billion) stake it owns in Sanofi.
Agon reaffirmed last week that his group had the firepower to enable it to buy Nestle's stake. Restrictions on Nestle selling down its L'Oreal holding end in April.
Viehbacher, who will unveil full-year results next month, said his group had strong growth drivers in vaccines, rare diseases, animal health and consumer health products, adding that a lot of the focus for 2014 would also be on the promising drug pipeline.
In particular, he highlighted the potential of a new kind of cholesterol drug and two immunology medicines being developed by U.S. biotech firm Regeneron Pharmaceuticals (REGN). Sanofi has a stake in Regeneron and an option to increase it further.
Sanofi suffered a blow last month when its Lemtrada multiple sclerosis (MS) treatment failed to win approval from U.S. regulators, but Viehbacher said he remained confident that MS would develop into an important business.
Lemtrada will still be available in other markets and the company also has another MS drug, Aubagio, which is doing well.
"The MS market is not quite so skewed to the U.S. as it is in other areas and the markets in Europe and Canada are huge. Aubagio is also going well. The MS market is expected to be about $14 billion by 2017, so if you get only 10 percent market share you are going to have quite sizeable products," Viehbacher said.
Some investors are nervous about Sanofi's outlook over the next few years because its growth still depends heavily on the top-selling diabetes treatment Lantus, which could face so-called biosimilar competition in 2015.
Viehbacher, however, played down the threat, pointing to uncertainties over market acceptance of such copycat biotech drugs - which are similar to but not exact copies of the original - and the fact Sanofi had a promising follow-on to Lantus in development.
"We see our diabetes franchise being able to demonstrate growth beyond 2015," he said.
(Editing by Pravin Char)