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Paris - French pharmaceuticals giant Sanofi said on Friday that profits would stagnate for the next two years, prompting a heavy sell-off of its shares on the Paris stock exchange.
The profit warning came alongside an announcement of a major restructuring drive for the drugs company, which includes streamlining its product portfolio and a possible spin-off of its animal-health division.
Sanofi said it expects "no significant growth" in net earnings per share in 2016 and 2017.
In late morning Paris bourse trading, Sanofi shares were down 5.5% at €88.18.
"The fact that there is no prospect of profit growth before 2018 is going down very badly with investors," said Xavier de Villepion, a stock trader at the HPC brokerage.
Sanofi said its portfolio revamp was to yield €1.5bn ($1.63bn) in savings by 2018, most of which would be reinvested in the launch of new drugs.
"The group's businesses will remain diversified but with a portfolio that is focused on areas where we can be leaders," Sanofi director general Olivier Brandicourt said in a statement.
Sanofi plans to launch 18 new products over 5 years, including six major drugs - Toujeo, Praluent, Dengvaxia, sarilumab, LixiLan and dupilumab - which alone could generate €12bn to €14bn of sales over the next decade, Sanofi said.
A massive increase in research and development costs was to accompany the launches, thus placing Sanofi on a "sustainable growth trajectory over the long term", Brandicourt said.
Sanofi said it may also seek takeover targets and could spin off its animal-health unit Merial because the subsidiary's synergies with the rest of the group were "limited".
Sanofi posted a 37% increase in net profit for the third quarter to €1.6bn.
In its latest Global Innovation rankings, consulting firm pwc declared Sanofi to be France's most innovative company.
