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Sanofi touts new drugs but diabetes outlook disappoints

A logo is seen in front of the entrance at the headquarters French drugmaker Sanofi in Paris October 30, 2014. REUTERS/Christian Hartmann

By Natalie Huet

PARIS (Reuters) - Sanofi (SASY.PA), which sacked its chief executive three weeks ago, gave a weak sales outlook for its diabetes drugs on Thursday, overshadowing plans to reap more than 30 billion euros (23.97 billion pounds) from new medicines.

The French drugmaker said it aimed to launch up to 18 new drugs by the end of 2020 and told investors it was working hard to find the best possible successor to ex-CEO Chris Viehbacher.

"There is a driver in the seat even in this interim period," said Chairman Serge Weinberg, who has taken the helm while Sanofi looks for a new boss. He restated that investors should not expect any change in the group's strategy.

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He would not comment on potential candidates to the top job, only saying Sanofi was searching for a CEO outside of the company and that names floated in the press were "pure speculation" at this stage.

Investors are concerned about Sanofi's management and financial prospects since the drugmaker warned last month that sales of its popular Lantus insulin were slowing more sharply than expected. The board subsequently sacked Viehbacher over his go-it-alone management style.

Sanofi had previously said it would not give more detailed financial guidance before annual results in February.

But it warned on Thursday that its diabetes business, which accounts for more than a fifth of group revenue, would post little or no growth between 2015 and 2018, sending its shares down 2.4 percent.

That outlook clouded an investor event focused on drugs it expects to launch in the coming years, including the world's first vaccine against dengue fever, the injectable cholesterol-lowering drug alirocumab and the allergy treatment dupilumab.

"I would not trade this pipeline with anybody else's pipeline," said Sanofi head of research Elias Zerhouni, quashing speculation that Viehbacher's removal might tempt him to leave.

Sanofi aims to launch up to six new medicines in 2015 alone and about one every six months between 2016 and 2018. It hopes the launches will help mitigate its dependence on Lantus, the world's most prescribed insulin and its top-selling drug.

Sanofi and its partner Regeneron (REGN.O) also said the U.S. Food and Drug Administration had granted a fast-track development and review process to dupilumab in the treatment of atopic dermatitis, a chronic form of eczema.

Sanofi's forecast in diabetes assumes a substantial conversion of patients from Lantus to an improved version of the drug, Toujeo, continued sales growth in emerging markets and U.S. launches of new drugs like the inhaled insulin Afrezza.

Leerink analyst Seamus Fernandez said the downbeat assessment for diabetes sales and the fact Sanofi was banking on substantial patient switching to Toujeo meant the firm would make less than his assumed sales growth of 2 percent over 2015-2018.

Diabetes drugs, a market expanding worldwide as obesity increases, have long been Sanofi's cash cow but the drugmaker's pricing power is set to shrink as so-called biosimilar copies enter the market over the next two years.

(Additional reporting by Ben Hirschler; Editing by Jason Neely, Jane Merriman and Keiron Henderson)