Sanofi-Aventis posted a drop in first-quarter earnings, knocked by growing generic competition to several of its top drugs as well as a hole in sales from H1N1 or swine flu vaccines.
The French drugmaker expects its $20.1 billion cash takeover of US biotech Genzyme, which it completed earlier this month, to help it counter its growing exposure to cheaper generic drugs as it adds treatment of rare diseases as a new growth area.
Sanofi said in its earnings statement the integration of Genzyme had begun well and that in the next months it would scrutinize Genzyme's entire drug pipeline to assess what drugs would get priority in their development.
Genzyme has 10 drugs in clinical trials, three of which are in promising late stage trials. Genzyme's drugs would add to Sanofi's pipeline of 64 products, including vaccines.
The company said that it would update its expectations for the full year at its first-half earnings presentation in July.
Business EPS, which excludes items like amortisation and legal costs, fell 10.8 per cent to €1.66 in the first quarter against the Reuters poll's average for €1.63.
Sales fell 1.5 per cent to €7.779 billion compared with consensus for €7.659 billion on business net income down 10.6 per cent at €2.17 billion.
Generic competition became stronger and weighed on Sanofi's high-margin branded drugs such as anti blood clotter Lovenox and cancer drug Taxotere.
As with vaccine makers such as GlaxoSmithKline and Novartis, H1N1 flu vaccine sales no longer featured in the books, taking Sanofi's total vaccine sales down 38.3 per cent to €602 million in the quarter.
Growth came, however, from areas Sanofi expanded in as part of its strategy to diversify its business and which include emerging markets and consumer health products which increased 45 per cent. Overall, growth platforms took up nearly 60 per cent sales in the quarter.
Separately, Genzyme reported a 7 per cent rise in its first-quarter sales to $1.009 billion. The first-quarter sales are not consolidated in Sanofi's accounts.
Reuters
