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Sanofi predicts return to growth in second half

But first quarter net income drops by a third
Sanofi reception

Solid results from new products and emerging markets helped offset generic competition for Sanofi in the first quarter, with overall sales down just 2.8 per cent in the quarter.

Sanofi is still weathering the effects of patent losses in 2012 for antiplatelet drug Plavix (clopidogrel), Avapro (irbesartan) for high blood pressure and cancer therapy Eloxatin (oxaliplatin) which collectively lost €553m-worth ($728m) of revenues in the first quarter. 

Overall, Sanofi posted net income down a third to €1.6bn on quarterly revenues of €8.06bn, with the impact on profit largely accounted for by generic erosion.

However, newer products still in the growth phase - including diabetes products, vaccines and specialty drugs sold by Sanofi's Genzyme unit - helped offset the declines with a near-9 per cent increase in sales to €5.72bn that now accounts for more than 70 per cent of the pharma company's total turnover.

Chief executive Chris Viehbacher said that these platforms - along with a slew of new products on or nearing the market - will help Sanofi "resume growth in the second half of 2013".

Drilling down into the numbers, Sanofi's diabetes franchise grew nearly 20 per cent year-on-year on the back of good performances by Lantus (insulin glargine) - up 21 per cent to €1.34bn - and Apidra (insulin glulisine) which staged a recovery to grow 30 per cent to €66m in the quarter.

Genzyme's portfolio of rare disease therapies increased more than a quarter to €493m as restricted supplies of Gaucher disease therapy Cerezyme (imiglucerase) and Fabrazyme (agalsidase beta) for Fabry disease caused by manufacturing problems continue to be resolved and multiple sclerosis Aubagio (teriflunomide) rolls out in the US.

Cerezyme grew 17 per cent to €171m, while Fabrazyme sales doubled to €92m and Aubagio added €20m following its US approval last September.

Meanwhile, vaccine sales were another bright spot for Sanofi with a 16 per cent hike in first-quarter sales to €697m, driven mainly by seasonal flu and paediatric vaccines, and the recent launch Auvi-Q - the first epinephrine auto-injector with audio and visual cues for the emergency treatment of life-threatening allergic reactions - made €6m in its first few weeks on the US market.

Viehbacher said the early launch trends for Aubagio and Auvi-Q are encouraging, while recent regulatory approvals for diabetes therapy Lyxumia (lixisenatide), Zaltrap (aflibercept) for colorectal cancer and childhood vaccine Hexyon/Hexacima in the EU will help drive growth in the second half.

He also pointed to important phase III data releases due later this year, including for its improved Lantus (insulin glargine) formulation and cholesterol candidate alirocumab.

2nd May 2013

From: Sales

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