Sanofi SA (ADR) (SNY), Regeneron Pharmaceuticals Inc (REGN): Getting Closer

Foolish take
Sanofi has certainly profited from its stake in Regeneron. Buying more shares in February when the company first announced plans to do so would have been a smart move. Since then, Regeneron’s stock has jumped more than 70%.

Is buying more of Regeneron still a smart move for Sanofi? It’s certainly not a cheap proposition. Regeneron trades at a price-to-earnings multiple of 38. Its forward P/E is even higher. That being said, I don’t think it’s a bad idea for Sanofi to incrementally raise its position size in Regeneron over time.

ViroPharma could certainly be a good acquisition — but only if the price isn’t ridiculously high. The news of a potential buyout drove ViroPharma shares up to more than $39 per share. I don’t see it making sense for Sanofi to pay much more than $45 per share.

The best stock for Sanofi to buy just might be its own. Cosmetics company L’Oreal currently owns 9% of the company. L’Oreal’s CEO has indicated that it might want to sell that stake. Sanofi seems to have its eyes on a couple of biotechs, but the best value could be found by simply looking in the mirror. Sometimes the smartest way to handle money burning a hole in your pocket is to just put it in another pocket.

The article 2 Biotechs Catching Sanofi’s Eye originally appeared on Fool.com is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned, and neither does The Motley Fool. 

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