French drugs maker Sanofi (SNYNF) will report its third-quarter earnings on Friday, with investors looking for evidence that volumes and margins are holding up at its under- pressure insulin business and signs of growing sales momentum for its cholesterol drug Praluent.

Sanofi's earnings have stagnated this year, leading analysts to downgrade earnings per share forecasts to about €5 ($5.44) for the full year, notably after the company downgraded its diabetes drugs sales forecasts to a  minus 4% to minus 8% range between 2015 and 2018.

Earnings per share dropped 10% to €0.90 in the second quarter, on a 5.1% decline in second-quarter sales to €8.1 billion. Net profit fell 11.1% to €1.16 billion. Sanofi said that earnings for the rest of the year should be broadly stable at constant exchange rates so any further decline could be punished.  

The key to the third-quarter results will be the balance of sales between Sanofi's biggest selling Lantus diabetes drug, which fell 11.2% in the second quarter compared with a year earlier, and the rate of the revenue increase from new diabetes drug Toujeo.

Toujeo posted €106 million in U.S. revenues in the second quarter, and global sales of €141 million. That latter figure was up 37% on the first-quarter result and ahead of consensus of about €125 million, and investors will be looking for a similar increase in the third quarter.

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Oncology drug Praluent, developed with Regeneron (REGN) - Get Report , has made a slow debut and investors will be looking for an acceleration of its growth, and evidence that growth hasn't come at the cost of pricing, which remains as much as three times higher than rivals' cholesterol-reducing drugs. Praluent posted sales of €21 million in the second quarter, slightly below analysts' expectations, while Sanofi said that a gradual improvement in insurance reimbursements in the U.S. and Europe should help drive growth for the rest of the year.       

Finally, analysts will be hoping for a hint that Sanofi is back on the acquisition trail after it missed out on Medivation (MDVN) , after its hostile offer was topped by an agreed offer worth $14 billion from Pfizer (PFE) - Get Report .

Sanofi has a strong balance sheet with net debt to Ebitda of about 0.7 times, less than half its European rivals' average of about 1.6 times. And its potential to raise more funds for acquisitions was underlined in September when it sold €1 billion of 3.5 year loans with a coupon of minus 0.5%,  becoming one of only two European corporate issuers, alongside German consumer goods maker Henkel, to be paid to borrow money.

"An acquisition which adds a near-term revenue and profit stream with some pipeline would be optimal," Exane analysts recently noted. "Sanofi  has  stated  its  ambition  to  return to  a  leading  position  in  oncology  and  this  area  would  make  for  an  interesting  bolt-on."

Exane has a neutral rating on Sanofi and a €78-per-share target price. Sanofi shares on Monday afternoon in Paris were up 0.3% at €69.43.