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Sanofi expects €1.4bn hit from patent losses in 2012

Will face increased generic competition for Plavix and Avapro

Sanofi is anticipating €1.4bn will be knocked off net income for 2012 due to increased generic competition for its blood thinner Plavix and hypertension treatment Avapro.

The company also expects earnings per share to drop by between 12 and 15 per cent in the year ahead, taking into account the decline in sales and the expected performance in other areas of the business.

Sanofi is already feeling the effects of generic competition for Plavix, which it co-marketed with Bristol-Myers Squibb, and annual sales of the drug fell 2.1 per cent in 2011 to €2.04bn.

But total sales for the company were up during 2011 climbing 3.2 per cent from 2010 to €33.39bn and Sanofi saw strong performance from its 'growth platforms', which include emerging markets, diabetes and consumer health.

Emerging markets revenues were up 10.1 per cent to €1.54bn, diabetes grew 12.5 per cent to €1.24bn, and consumer health made €645m – an increase of 15.4 per cent from the previous year.

Diabetes sales were driven by Lantus, which annual revenues nearly breaking €4bn.

There was also an uplift from the Genzyme business, which Sanofi acquired in January 2011. This brought in sales €2.40bn for the period of April to December 2011.

Combined, growth platforms and Genzyme accounted for 65 per cent of Sanofi's total sales performance during 2011.

Despite this total growth in sales, net income for Sanofi fell by 4.6 per cent for 2011, with the company facing increased R&D, selling and general expenses related to the purchase of Genzyme.

The company also faced €1.31bn in restructuring costs during the year, including €777m in the fourth quarter.

Commenting on the Sanofi performance in 2011, CEO Christopher Viehbacher said: “We successfully acquired and integrated Genzyme, our growth platforms recorded double-digit growth, we delivered cost savings as planned and submitted filings to regulatory authorities for five new products.

“Beyond the remaining patent cliff in 2012, the robust performance of our diversified growth platforms, the reduced exposure to future patent expiries and progress on R&D, position Sanofi for a period of sustainable growth.”

8th February 2012

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