With Sanofi ($SNY) riding the tail end of the latest earnings wave, its sales and profits shortfall feels like more of the same. It hasn't been a good quarter for Big Pharma, and Sanofi's results fall right in line with the rest. Its 5.3% sales drop was less severe than most, while its profits suffered a bit more, with a 34% decline.
But unlike its rivals that reported earlier this week--namely Pfizer ($PFE) and Merck ($MRK)--Sanofi didn't cut its full-year forecast. Its first quarter was about as bad as the company had expected, if some of the individual pieces performed above or below forecasts. Analysts, however, had predicted slightly better profits--€1.75 billion, rather than the reported €1.61 billion ($2.1 billion).
The reasons behind Sanofi's sales blight are familiar: Its megablockbuster Plavix lost patent protection at the end of last year's first quarter, and generic rivals for the cancer drug Eloxatin and blood pressure treatment Avapro also took their toll. What saved Sanofi from a bigger sales hit was Lantus, the big-selling diabetes treatment. It brought in €1.338 billion, an increase of 21%, and about 16% of the company's overall sales for the quarter. Emerging markets also helped, with a 6.5% rise to €2.719 billion.
"We are in the last quarter of the patent cliff," CEO Chris Viehbacher said at the earnings announcement (as quoted by Reuters). "The numbers, when you look at them, really reflect the history, but I think it's the future of the company that is particularly exciting," Viehbacher told reporters.
The company will get back into a growth pattern during the second half of the year, Viehbacher promised. The company's "growth platforms"--including diabetes, Genzyme and emerging markets--grew by 8.6% this quarter and will amp up from there, he says.