Sanofi-Aventis SA, whose shares have fallen 10 percent since a U.S. panel rejected its most promising medicine last month, may follow rivals GlaxoSmithKline Plc and Pfizer Inc. and seek to win back investors with cash.
The world's third-largest drugmaker is expected to say second-quarter profit barely grew this week. The Paris-based company may also disclose plans to spend as much as 30 billion euros ($40.9 billion) on its own shares by 2011, buying it time to convince investors that other drugs in development are worth waiting for, says HSBC Securities analyst Kevin Scotcher.
Like Pfizer and Glaxo, Sanofi is struggling to boost profit as key medicines lose revenue to generics. Last month's setback will make it harder to replace sales lost to cheaper versions of some of the company's biggest drugs, including Ambien, the sleep pill that lost patent protection in April. A buyback would signal Sanofi is confident about drugs in its pipeline and quash speculation it may buy Bristol-Myers Squibb Co., analysts said.
``Saying they're going to put money into a buyback rather than make a big acquisition would be saying `we're sticking to what we're doing,''' New York-based Scotcher said in a July 25 telephone interview. ``What they need to do on Aug. 1 is make a statement about a specific amount for a specific period.''
More at Bloomberg
No comments:
Post a Comment