Sanofi Eur2 (EU:FR0000120578-EUR)
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6 Months : From Dec 2016 to Jun 2017
By Preetika Rana
BEIJING-- Sanofi SA expects its drug sales in China to grow at least 10% this year, helped by its push outside cities and efforts to tailor medicines to suit local needs, senior executives said.
Sales in China last year exceeded EUR2 billion ($2.15 billion), making it the French company's third-largest market after the U.S. and France. Drugs accounted for EUR1.8 billion, with the rest from vaccines and consumer health products.
Sanofi said its drug division outpaced rivals in China last year with sales growth of about 10%--excluding the impact of currency fluctuations--though overall sales rose only 0.5% as Beijing's newly tightened vaccine-distribution rules, meant to prevent illegal sales, also created shortages. Sanofi said its vaccines business has shown an uptick this year.
In a large, complex market like China, the "agility of the company to adapt to all those challenges makes a difference," Olivier Charmeil, executive vice president for emerging markets, said in an interview.
Globally, Paris-based Sanofi is under pressure to replenish its drug pool as sales slow for the blockbuster diabetes drug Lantus, which lost U.S. patent protection in 2015. But its oncology ambitions suffered a blow when a multibillion-dollar bid for San Francisco-based cancer-treatment company Medivation Inc. fell through last April. In December Sanofi's talks with Actelion Ltd., which focuses on rare diseases, ran aground when the Swiss company began exclusive negotiations with Johnson & Johnson.
While Sanofi is still counting on acquisitions, it is also betting on emerging markets, Mr. Charmeil said. Led by China, they accounted for EUR9.5 billion of Sanofi's EUR33.8 billion in sales last year.
Jean-Christophe Pointeau, Sanofi's China head, said he expected the company's drug sales in China "to continue to grow double-digits" this year as volume expands. He didn't offer specifics.
Sales got a lift last year from a push at government-run health clinics, where Sanofi began giving doctors guidance on its treatments for chronic diseases such as diabetes and respiratory ailments, which cause millions of deaths in China every year. Mr. Charmeil said the push has covered more than 3,500 clinics and will continue this year. A separate program trains doctors at rural hospitals.
In recent years, Sanofi has tailored some products for China. For example, Eloxatin--typically prescribed for colorectal cancer--is now used to treat liver cancer in China, after the company conducted studies there that demonstrated its effectiveness. Oncology drugs last year became Sanofi's fastest-growing category in the country.
The company plans to launch nearly a dozen drugs in China by 2020, including some customized to suit the local market, like Eloxatin.
The world's second-largest drug market after the U.S. has been tough for foreign players to crack. In particular, a rule requiring local clinical studies on imported drugs has meant years of delay. On Friday, the China Food and Drug Administration said it is considering doing away with this rule and expects to decide this year.
Mr. Pointeau said the change would attract greater investment from drugmakers and dramatically reduce the time to introduce blockbuster treatments.
"It's a huge, huge breakthrough," he said.
Write to Preetika Rana at email@example.com
(END) Dow Jones Newswires
March 21, 2017 01:26 ET (05:26 GMT)
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