Sanofi is expecting to be hit hard by an up to 15% drop in earnings for the coming year as money-spinners Plavix and Avapro go off patent – but the company is confident growth will return after 2012.
The French company saw fourth-quarter income increase 13% to 2.08 billion euros – above the 2.07 billion euro forecast.
Sales were strong in the fourth-quarter with an 8.8% increase to 8.5 billion euros. The fourth-quarter increases were driven by emerging markets, the company’s acquisition of Genzyme and more than 1 billion euros worth of sales of the diabetes drug Lantus. Indeed, diabetes for the full year delivered growth of 12%.
However, the rosy end to 2011’s financial year will not be matched in 2012, with the company expecting a dent of some 1.4 billion euros in net income as generic competition comes in to play for blood-thinner Plavix (clopidogrel) and blood pressure drug Avapro (irbesartan). This news saw shares in the company drop 3% at one point.
Despite the effect of the patent cliff, Sanofi has a strong outlook for beyond 2012 with expected annual growth of 5% and faster earnings per share growth to 2015.
“2012 has been marked red in my diary for years,” chief executive Chris Viehbacher told Bloomberg. “We cannot compensate for that in one year but we can compensate over time. As we come out of the cliff, Sanofi is extremely well positioned for growth.”
Bonuses for the company moving forward include growth in the emerging markets, diabetes products, vaccines, consumer healthcare, veterinary medicines and new patented drugs, including the hopeful approval of multiple sclerosis drug Lemtrada (alemtuzumab).
Also positive for the company is the recent US Food and Drug Administration approval of the new Fabrazyme (agalsidase beta) manufacturing plant in Framingham, Massachusetts, which will help the supply shortages that have hampered the rare-disease drug. Likewise “production recovery is well underway” for fellow rare-disease drug Cerezyme (imiglucerase), the company said.
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