The chief executive officer of Sanofi, Chris Viehbacher, recently stated that he believes that the pharmaceutical industry is undervalued. As his company is currently coping with the patent expiry of some of its popular drugs, Viehbacher told interviewers at Reuters, “We’re not in a market that’s really looking at fundamentals right now. Personally, I think this is an industry that is getting ready for a re-rating.”
Since Viehbacher is expecting some of Sanofi’s biggest-selling drugs — like Plavix, Lantus and Avapro — to experience a significant decline in sales once the generic versions become available, he says, “You typically have low double-digit PEs (price earnings ratio) for the market and my ambition for Sanofi, and I think for what the industry would be too, is to at least close the discount.” However, Viehbacher isn’t expecting this to cause any bumps for Sanofi investor payouts.
In fact, Viehbacher is expecting just the opposite. One thing Viehbacher is doing to keep his investors happy is diversifying the products that Sanofi offers. He is also promising that Sanofi’s dividend will rise from a 35 percent payout to a 50 percent payout by 2014. Sanofi is intending to maintain that higher rate for many years to come. Viehbacher says, “If you are going to make commitments on dividend policy, you have to be prepared to make those long term.” He points out the studies that companies that give higher dividend payouts “do better versus the broader market than those who do buybacks, in terms of share price.”
This is an interesting financial announcement, since Sanofi’s atrial fibrillation drug Multaq has recently been under fire for its link to liver failure and heart complications that are expected to bring about many lawsuits by patients that have taken the drug. A recent PALLAS Study of Multaq conducted by the company had to be stopped after the drug was found to cause irregular heartbeats and deaths among its patients.
If you have taken Multaq and experienced liver failure or irregular heartbeats, contact attorney Greg Jones today for a free consultation. I am experienced at fighting drug companies and may be able to help you recover money for your injuries.
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