Sanofi SA's chief executive has already put his company's patent expiration woes in the rear view mirror and believes that the French drugmaker and the pharmaceutical industry are undervalued.

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, Sanofi CEO Chris Viehbacher told Reuters in an interview in New York.

He said that could take place once investors digest the anticipated sales declines for huge selling drugs like Sanofi's Plavix and Pfizer's
Lipitor that are bracing for imminent generic competition.

Sanofi's price-to-earnings ratio is about 7.5 times next year's projected earnings. Several rival drugmakers are also in the high single digits.

You typically have low double-digit PEs 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, he said.

Viehbacher, whose company makes a top-selling diabetes drug Lantus, is a bit envious of companies whose products have been accused of contributing to such health problems.

I'd like to have the same P/E as people who make sodas and potato chips, quipped the charismatic 51-year-old CEO. The soft drink sector has an average P/E ratio of 16.3, according to Thomson Reuters data.

The Paris-based company, whose Plavix blood clot preventer and Avapro blood pressure drug face generic competition next year, has taken steps to shore up investor confidence by diversifying product offerings and promising its dividend will go from a current 35 percent payout rate to the 50 percent range by no later than 2014.

The company plans to maintain that higher rate -- the proportion of net company business income that is given to investors in the form of dividends -- for years to come.

If you are going to make commitments on dividend policy, you have to be prepared to make those long term, he said.

Viehbacher said studies have shown that companies that provide higher dividend payouts do better versus the broader market than those who do buybacks, in terms of share price.

SON OF PLAVIX NOT NECESSARY

Sanofi is relying on vaccines, animal health and consumer health products, as well as emerging markets, for sustained profit growth in the post-blockbuster era for drugmakers.

You don't have to come up with the 'son of Plavix' to make your company succeed, he said. He already views drugs about to lose patent protection like Plavix as discontinued business.

Viehbacher is no stranger to such cycles in the drug business. He became Sanofi's CEO in 2008 after heading pharmaceuticals in North America for GlaxoSmithKline .

This is the fourth time I've been through a patent cliff in my career and the objective of this is to avoid a fifth one, he said.

Viehbacher said the company's recent $20.1 billion purchase of U.S.-based Genzyme and its biotech drugs for rare diseases dovetails with that strategy. He said integration of Genzyme was going well, and that he did not plan more large deals.

The company is nicely balanced, so I don't particularly see any reason to go out and do big deals, so that's completely off our radar screen, Viehbacher said. We're going to continue to spend about 1 to 2 billion euros ($1.36 billion to $2.7 billion) per year on acquisitions.

CASH MACHINE

Viehbacher said he expects Genzyme's manufacturing woes to be largely resolved by the middle of next year with the opening of a new plant in Framingham, Mass. the most critical step.

Genzyme failed to ship its drug for Fabry disease, Fabrazyme, in August despite prior assurances, and will have limited supplies of Gaucher disease drug Cerezyme through January, opening the door to further inroads by rivals.

Viehbacher, who described his company as a cash machine said Sanofi's resources had helped get several delayed Genzyme projects back on track, including three Phase III trials.

He expressed confidence in Genzyme's experimental multiple sclerosis drug Lemtrada, which will have critical Phase III data this year after reducing MS relapses by 60 percent in Phase II trials. And he is excited about a new diabetes treatment from the GLP-1 class that Sanofi is developing and also plans to combine with Lantus.

Sanofi plans to file for approval of six new drugs over a nine month period, Viehbacher said. He said the success of Lemtrada and other new drugs would restore faith in the company's research and development reputation.

Meanwhile Viehbacher said Lantus, Sanofi's $5.2 billion-a-year long-acting insulin, was not likely to see generic rivals in the foreseeable future.

You're going to have other competitors, he said, citing new products coming from rivals Novo Nordisk and Eli Lilly , but at this stage we don't see anything that causes us great concern.

He also appeared to shrug off concerns that Sanofi's Multaq drug for irregular heartbeat could face sales limitations or even be pulled from the market over safety concerns.

A European regulatory panel will discuss Multaq safety this week after heart problems surfaced in a study of patients with a more serious permanent form of atrial fibrillation. The drug is now typically given to patients whose incidence of irregular heart rhythms comes and goes.

All of the conversations we've had with the agencies to date have been very positive, he said. We believe that the benefits clearly are there for the patients.

(Reporting by Ransdell Pierson, Bill Berkrot and Lewis Krauskopf, editing by Michele Gershberg, Gunna Dickson and Tim Dobbyn)