Sanofi Q1 tarnished by generics, H1N1 absence
PARIS |
The French drugmaker expects its $20.1 billion cash takeover of U.S. 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 on Thursday 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.
Sanofi's quarterly earnings came in just above the average outcome of a Reuters poll and 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 amortization and legal costs, fell 10.8 percent to 1.66 euros in the first quarter against the Reuters poll's average for 1.63 euros.
Sales fell 1.5 percent to 7.779 billion euros ($11.41 billion) compared with consensus for 7.659 billion on business net income down 10.6 percent at 2.170 billion euros.
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 (GSK.L) and Novartis (NOVN.VX), H1N1 flu vaccine sales no longer featured in the books, taking Sanofi's total vaccine sales down 38.3 percent to 602 million euros 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 percent. Overall, growth platforms took up nearly 60 percent sales in the quarter.
Separately, Genzyme reported a 7 percent rise in its first-quarter sales to $1.009 billion. The first-quarter sales are not consolidated in Sanofi's accounts.
Sanofi's results will come on a busy earnings day for the drug industry, with AstraZeneca (AZN.L) and Bayer (BAYGn.DE) in Europe and Bristol Myers Squibb (BMY.N) in the United States among those reporting.
(Reporting by Caroline Jacobs, Editing by Lincoln Feast)
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