Sanofi shares plunge after 2025 target dropped

STORY: Sanofi shares plummeted more than 15% on Friday (October 27).

Investors didn't like hearing the French drugmaker abandon its 2025 profit target.

The company also said its consumer unit could be heading for a spin off.

Sanofi is pushing to spend more on immunology and inflammation drug development.

In doing so, it dropped its target for a 32% operating profit margin for 2025 to focus on 'long-term profitability'.

One leading analyst said the spin-off would be welcomed by investors, but warned the cuts to earnings ambitions over the next two years were 'substantial'.

Sanofi expects adjusted earnings per share to fall by a 'low single-digit' percentage next year.

It sees a strong rebound in two years' time, but not enough to sustain the previous margin target.

Sanofi CEO Paul Hudson said the core innovative drugs business had improved enough to soon do without the cash flows from consumer products.

Sanofi said the potential consumer listing would be in the fourth quarter of 2024 or later.

The company would not comment on further details of the planned listing, or whether it might sell the business.

Sanofi said it is targeting cost savings of up to $2.11 billion from next year until the end of 2025.

The company reported business operating income had dropped by a tenth in its third-quarter to $4.25 billion.

That was slightly below the average analysts' estimate.