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Sanofi First Quarter Shows Why It Wants but Doesn't Need Medivation

French drugs maker Sanofi (SNY - Get Report) on Friday released flat first-quarter results that simultaneously demonstrated why it was willing to pay $9.3 billion for Medivation (MDVN - Get Report) and why it could be reluctant to significantly hike its bid.

Sanofi's net profit for the quarter was €1.72 billion ($1.96 billion) down 0.2% on a year earlier, though up 3.5% once exchange-rate movements are stripped out. The results beat many analyst estimates.

The figures highlighted declines in key medicine sales, notably an 11% fall in Sanofi's biggest selling drug, Lantus, a diabetes treatment that recently lost patent protection in the U.S. But that decline was offset by impressive growth in its Genzyme biotech unit and animal-health business Merial, where sales grew 20.5% and 17.5%, respectively.

By buying Nasdaq-listed Medivation, a cancer drug developer, Sanofi would be chasing similar growth. Medivation is likely to post sales of about $1.15 billion in 2017 rising to $1.7 billion in 2020, Goldman, Sachs & Co. noted on Thursday. Those forecasts could prove hugely conservative if the company succeeds in expanding...