PARIS: Sanofi expects to return to profit growth this year on the back of two recently announced acquisitions and a revamped drugs pipeline, after fourth-quarter earnings were dented by a charge related to its troubled dengue vaccine.

France’s largest drugmaker forecast on Wednesday earnings per share (EPS) would grow 2-5 per cent at constant exchange rates this year, after a 0.4 per cent drop in 2017.

CEO of the pharmaceutical giant Olivier Brandicourt announced the group’s 2017 results in Paris on on Wednesday. Some analysts, however, said the guidance fell short of hopes and Sanofi shares were down 2.1 per cent in early trading to touch their lowest since June 2016.

“FY’18 EPS guidance at mid-point, including the impact of acquisitions, is 3 per cent below consensus at December rates, but we estimate 4 per cent below at current exchange rates,” analysts at investment bank Jefferies wrote in a note.

The group should benefit from a cut in US corporate tax, with Sanofi predicting its tax rate would be around 22 per cent in 2018, down from 23.5 per cent last year. The company struck two big takeover deals last month, agreeing to buy US haemophilia specialist Bioverativ for $11.6 billion and Belgium’s Ablynx, which is developing a prized experimental drug for a rare blood disorder, for 3.9 billion euros ($4.8 billion).

The transactions mark a return to successful deal-making for Sanofi after failures to land major takeovers since 2011, when it bought U.S biotech company Genzyme for around $20 billion, although some investors questioned the costs.

The deals will complement Sanofi’s rare diseases business, while its diabetes sales continue to suffer from generic competition, especially in the United States, the world’s largest health market.

In the fourth quarter, sales at the group’s diabetes and cardiovascular unit were down nearly 20 per cent.

Sanofi said it had booked an impairment of 87 million euros related to Dengvaxia, its dengue vaccine currently at the centre of a health scare in the Philippines, in the fourth quarter.

Reuters