Sanofi Earnings Knocked by Generics

Sanofi’s fourth quarter earnings have been hit by generics, although the majority of the patent cliff is now behind the French drugmaker, who anticipate a return to growth in the second half of 2013.

Business net income, which excludes items, dropped 27.1% to 1.57 billion euros (at constant exchange rates), mainly as a result of the loss of exclusivity on Sanofi’s blood thinner, Plavix, and their antihypertensive, Avapro, both partnered with Bristol-Myers Squibb, in addition to the antithrombotic, Lovenox, and colorectal cancer drug, Eloxatin.  Sanofi’s turnover fell by 1.7% to 8.53 billion euros, while pharmaceutical sales declined 4.8% to just over 7 billion euros.

Plavix brought in 503 million euros, a decrease of 6.2%, while Avapro/Aprovel fell 34.1% to 212 million euros.  The cancer drug Taxotere dropped 17.3% to 125 million euros, and Lovenox fell by 13.1% to 441 million euros.  Eloxatin sales crashed 80% to 68 million euros.

However it was not all bad news for the drugmaker, with their diabetes drug Lantus growing 22.6% to 1.34 billion euros, and Jevtana, used in prostate cancer, contributing 60 million euros, a rise of 25.5%.  Sales at Sanofi’s vaccines division were also up 20.5% to 1.02 billion euros, while the consumer healthcare business brought in 732 million euros.

Within Sanofi’s Genzyme unit, Cerezyme increased by 26.1% to 171 million euros and Fabrazyme grew by 74.5% to 84 million euros, as the business begins to recover from their previous manufacturing problems.

Chris Viehbacher, Sanofi’s chief executive, last year commented that it “was a turning point for Sanofi with the loss of exclusivity in the USA for several significant legacy drugs.”  He added that the organisation was able to obtain “nine significant regulatory approvals and submit six new files with regulatory agencies.”

Sanofi have recently moved their attention towards the emerging markets, vaccines, over-the-counter treatments, animal health and generics to lessen their reliance on branded medicines.  These activities now represent over 70% of the company’s sales and increased by almost 10% in 2012.

The expiration of Sanofi’s patent on Plavix, once the world’s second-best selling prescription drug, is expected to cut roughly 800 million euros ($1.1 billion) from Sanofi’s earnings in the first half of 2013, Sanofi noted.

Viehbacher concluded that although financials in the first six months are expected to experience “a residual effect from patent expirations, we expect to resume growth in the second half of 2013.”


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