Sanofi (SAN), France’s largest drugmaker, reported a 34 percent decline in first-quarter profit, crimped by generic competition to three key medicines in the U.S.
Profit excluding some costs, which Sanofi calls business net income, fell to 1.61 billion euros ($2.1 billion), or 1.22 euros a share, from 2.42 billion euros, or 1.83 euros, a year earlier, the Paris-based company said in an e-mailed statement today. That missed the 1.77 billion-euro average estimate of 12 analysts compiled by Bloomberg. Sanofi also announced a reorganization of its commercial operations, appointing two new members to its executive committee.
Chief Executive Officer Chris Viehbacher has sought partnerships and acquisitions to replenish Sanofi’s drug pipeline and make up for the revenue losses caused by generic competition to the Plavix blood thinner and other top-selling products. He is introducing new products such as Aubagio, a pill for multiple sclerosis, Lyxumia, a diabetes treatment, and Auvi- Q, which guide users through emergency allergy injections.
First-quarter results were “mostly impacted by the comparison with last year, prior to the patent expiry” of Plavix and the Eloxatin cancer medicine, Viehbacher said in a conference call with reporters today. Sanofi also reported “strong growth” at its so-called growth platforms, he said.
Sanofi shares have returned 50 percent over the past year including reinvested dividends, beating the 32 percent return of the Bloomberg Europe Pharmaceutical Index.
Revenue slipped 5.3 percent to 8.1 billion euros in the first three months of the year, missing the average analyst estimate for 8.3 billion euros. Revenue from its top-selling Lantus insulin advanced 20 percent to 1.34 billion euros.
Viehbacher reiterated he expects growth to resume in the second half. Revenue for the company’s growth platforms -- diabetes, consumer health, vaccines, animal health, Genzyme, other innovative products and emerging markets -- climbed 8.6 percent to 5.7 billion euros.
Today’s results are in line with full-year guidance, Sanofi said. The drugmaker expects 2013 earnings per share excluding some costs to be unchanged at best or down 5 percent at worst from last year, excluding currency fluctuations.
Plavix lost market exclusivity in the U.S. a year ago. In the quarter, Sanofi also suffered from U.S. generic competition to Eloxatin and the Avapro hypertension drug. Generic competition wiped out 553 million euros of sales during the first three months of the year, Sanofi said. In the first half, cheaper copies of its medicines will probably lead to a total of 800 million euros in lost profit, it added.
Peter Guenter, Sanofi’s senior vice president of Europe, will be appointed executive vice president of global commercial operations, Sanofi said today. The French drugmaker also appointed Pascale Witz, president and chief executive officer of medical diagnostics at GE Healthcare Inc., executive vice president of global divisions and strategic commercial development. Both will join Sanofi’s executive committee.
The appointments, effective July 1, are in replacement of Hanspeter Spek, Sanofi’s president of global operations, who is due to retire this year.
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