PARIS - Sanofi-Aventis investors are looking for steady growth targets running up to 2015 and extra cost savings from the French drugmaker's strategy update next week.

They want to see the group putting the drug patent expiries that are hurting profits behind it, getting on with new projects and the integration of its U.S. acquisition, Genzyme, as well as addressing the question of a possible share buyback.

Sanofi is in the middle of its patent cliff years as several key medicines including cancer drug Taxotere and bloodthinner Plavix lose patent protection between 2008 and 2013 and face competition from cheaper generics.

In a bid to offset eroding drug sales, Chief Executive Chris Viehbacher has been extending Sanofi's pharmaceutical business to growth areas like animal health, emerging markets and, after buying U.S. biotech Genzyme earlier this year, rare diseases.

The strategy day should certainly help in rebuilding investor confidence in the stock, Helvea analyst Karl Heinz Koch said, echoing similar comments in a research note by Deutsche Bank analyst Mark Clark.

Focus on growth platforms, together with a likely increase in cost savings and possible resumption of share buybacks should position Sanofi for sustained long-term growth, Clark wrote.

Viehbacher's strategy is similar to that of British rival and former employer GlaxoSmithKline , which is emerging from a run of drug patent losses.

GSK has demonstrated the re-rating that can happen as the cliff moves into the rear-view mirror, Clark said, noting that GSK shares recently traded at 12 times expected 2011 earnings and adding that Sanofi has significant scope for re-rating.

At 7.4 times estimated 2011 earnings per share, Sanofi shares rank among the sector's lowest-rated peers after AstraZeneca . The stock is trading at around 50 euros after peaking this year at nearly 57 euros in early July.


Analysts expect Sanofi to extend its forecasts to 2015, predicting an increase in sales and earnings as growth areas, which made up 62 percent of first-half sales, form an increasing part of its business.

Sanofi's current forecasts are for 2013 sales of at least the 27.6 billion euros ($39.7 billion) made in 2008, and for net income close to the 7.2 billion achieved that year. But those are obsolete following the $20.1 billion Genzyme deal and other acquisitions.

Helvea analyst Koch said Sanofi would be cautious at first.

They are probably able to guide for a mid-single-digit sales growth through to 2015 but they'd be more prudent to guide for low- to mid-single digit and then outperform their target.

Net profit could be helped by more cost-savings on top of the 2 billion euros slated for this year versus 2008 and $700 million in savings by 2013 from the integration of Genzyme.

Deutsche Bank's Clark sees cost-savings of at least 500 million euros by 2013, while Raymond James analyst Eric Le Berrigaud sees double that amount, and Koch even more.

Koch said savings tied to Genzyme could exceed $1 billion, while the company could save an extra $500 million as volumes will drop with next year's expiry of patents on Plavix and blood pressure drug Avapro.

Given the shift in their portfolio toward specialty care and away from white pills for everyone, like (sleeping pill) Ambien, (allergy pill) Allegra, Plavix and Avapro, the manufacturing footprint needs to be adjusted, Koch said.


Raymond James' Le Berrigaud said a share buyback worth about 2 billion euros could prop up Sanofi's earnings per share in 2012 -- its toughest year of patent expiries.

Royal Bank of Scotland analyst Michael Leacock did not, however, expect Sanofi to follow in AstraZeneca and GSK's footsteps with a buyback, instead using its money for bolt-on acquisitions of companies or products to drive growth.

Investors want a company focused on growth, not one sitting on cash, Leacock said.

Sanofi has flung its doors open for partnerships with biotechnology companies and made acquisitions to beef up its pipeline with drugs that are tough to copy.

This year it has five drugs -- including diabetes drug Lyxumia, cancer drug Zaltrap and Alzheimer treatment Aubagio -- it aims to submit for U.S. and European marketing approval, but analysts say none of them is a silver bullet.

Each could have annual sales of 300-400 million euros, Le Berrigaud said: It's good to have the buzz and it ensures a news flow but it will not transform the group.

(Reporting by Caroline Jacobs; Editing by Helen Massy-Beresford)