Tuesday, October 28, at the opening of the Paris stock exchange, Sanofi fell from its pedestal: as the pharmaceutical company lost first place in the CAC 40, dethroned by Total.
Capitalization (number of shares multiplied by the share price) has fallen to 101 billion euros, against 108 billion for the oil company.
The tricolor drugmaker fell in effect almost 7% in the morning, after the publication of its quarterly results. Yet it has published a net profit of more than 3 billion euros made over nine months, a comfortable margin of 12% of turnover. They also confirmed, in passing, that the increase of 6% to 8% adjusted earnings per share expected for the year should be reached. Such downgrade occurs when a crisis begins to take hold and brings anxiety to pharmaceutical company management. There is still uncertainty about the future of Chis Viehbacher, the CEO of Sanofi.
But investors were mainly cooled by mixed outlook on the US market for diabetes, one of the main growth drivers for the group. In this area, “the prospects darken [because of] significant pricing pressure in the United States and a competition that could strengthen future” indicate the CM-CIC analysts in a note published on Tuesday. In particular, they cite the arrival on the market of competing products in the pipe: the Tresiba Danish laboratory Novo Nordisk, and the American Basaglar Lilly, expected for 2016.
For its part, Total has benefited from the increase in the dividend declared by its British rival BP.
Sanofi had first dethroned Total at index competition of the Paris Stock Exchange in November 2012. The oil company was introduced into the CAC 40 in December 1991, having previously dominated with its rankings head and shoulders above rivals. Sanofi had reached the top spot in November 2000, following its merger with Elf Aquitaine in 1999, displacing France Telecom. Total, however, had briefly lost its status in favor of the utility EDF for a few months between 2007 and 2008.
Sanofi and Total have a common history, which goes back to the oil company Elf Aquitaine. It is the latter, acquired by Total in 2000, which created Sanofi, as a subsidiary in 1970 to develop the health sector.