Sanofi has posted financials for the second quarter this morning which show that net profit sank 40.9% to 1.01 billion euros, battered by generic competition.
In terms of earnings, arguably more relevant is the French drugmaker's 'business net income', ie adjusted earnings excluding items, which fell 13.2% to 2.15 billion euros, while sales edged up 0.5% to 8.35 billion euros.
Pharmaceuticals were up 1.6% to 7.15 billion euros, a reasonable result given the scale of generic competition to key products. The antithrombotic Lovenox (enoxaparin) saw sales fall 38.1% to 536 million euros, while the bloodthinner Plavix (clopidogrel), partnered with Bristol-Myers Squibb, brought in 510 million euros to Sanofi’s coffers, down 5.2%.
Patent expiries meant that the cancer drug Taxotere (docetaxel) slumped 65.9% to 204 million euros, while the Ambien (zolpidem) sleep franchise sank 47.3% to 116 million euros.
Diabetes back on track
On the bright side, the Paris-headquartered firm's diabetes division contributed 1.17 billion euros (+3.5%), and Lantus (insulin glargine) made up 969 million euros of that, a rise of 4.6%. The new anti-arrhythmic Multaq (dronedarone) brought in 68 million euros, up 74.4%, while sales of Jevtana (cabazitaxel) for prostate cancer came in at 48 million euros.
Regarding its older products, the antihypertensive Avapro/Avalide/Karvea (irbesartan) also partnered with B-MS, edged up 1.5% to 343 million euros, while sales of the colorectal cancer drug Eloxatin (oxaliplatin) were up 163.8% to 248 million euros.
Sales at Sanofi’s vaccines division were down 5.6% to 706 million euros, hit by the lack of A/H1N1 vacciine sales in the quarter. The consumer healthcare business brought in 644 million euros (+11.4%) and generics revenues climbed 13.9% to 434 million euros.
Genzyme sorting manufacturing problems
Sanofi also announced separate financials for its recently-acquired Genzyme Corp which show that revenues (at constant exchange rates) grew 16.0% to just over $796 million. Cerezyme (imiglucerase) for Gaucher disease was up 58.3% to $166 million and Fabrazyme (agalsidase beta) for Fabry disease 3.5% to $30 million, which supplies still affected by the continuing effect of the temporary closure of the firm's Allston Landing, Boston facility in June 2009.
Sales of Lumizyme/Myozyme (alglucosidase alfa) for Pompe disease grew 42.0% to $99 million, while the sevelamer-based kidney disease treatments Renagel and Renvela brought in 137 million euros, up 14.6%.
In terms of Sanofi's growth platforms, chief executive Chris Viehbacher (pictured) said "I’m very happy to see that diabetes is growing at double-digits again" (at constant exchange rates), while emerging markets, "where Sanofi is by far and away the leader in this industry", grew 10.5%. He added that consumer health "is an extraordinarily important market for us" and is "clearly providing some new growth in markets like the USA".
Mr Viehbacher added that erosion of generic products cost the firm around 800 million euros. However, "equally we have seen very strong performance of our growth platforms" and by consolidating Genzyme results for two quarters in the second half of this year, business earnings per share should be 2%-5% lower than 2010 at constant exchange rates. He concluded by saying "most investors are interested in what the longer term outlook for Sanofi is".
