Sanofi ($SNY) reported its third quarter results today, and the pharma titan saw its profits slide to 3% versus the same period last year to just under €2.4 billion ($3.3 billion). Although the company saw good results with its diabetes franchise, sales of Taxotere fell 64.8% due to generic erosion. Another key drug, Lovenox, saw sales dip as well because of generic competition.
The drugmaker did see total sales grow to roughly €8.75 billion, or just under $12.1 billion. And echoing a theme seen with other drugmakers, emerging markets helped bolster the company. Sales in emerging markets were €2.6 billion ($3.6 billion), an increase of 6.8%. In BRIC countries alone, sales were up 20.2%.
Sales of diabetes drugs served to help the company, as they increased 12.4%. Lantus in particular did well, with sales increasing 14.6% in the U.S. to €580 million ($800.7 million). The drug was big in Japan, China and other emerging markets. In China alone, the company saw a doubling in sales due to its recent inclusion on the reimbursement schemes in Shanghai and Beijing.
Although news with diabetes drugs was good, Sanofi did see a big drop in Taxotere sales--down 64.8% to about $257 million. Lovenox sales fell 12.7% to about $682.6 million in sales.
Sanofi did see an impact on its Merial animal health sales during the quarter. They were roughly $646 million, a decrease of 5.2% reflecting the temporary generic competition of Frontline Plus in the U.S. However, the U.S. District Court for the Middle District of Georgia ruled in favor of Merial over the summer, holding that sales of PetArmor Plus products infringed the company's patent and barred Cipla and Velcera from making or selling those products in the U.S. The generic products already sold to retailers were not recalled and may still be available in the distribution channels, however.
Still, CEO Chris Viehbacher (photo) was positive. "The return to growth in sales and earnings in the third quarter reflects an important milestone as the company progressively puts the patent cliff behind it," he said in a statement. "The integration of Genzyme is progressing well. Our growth platforms again achieved double digit growth and more than compensated for generic erosion. We continue to make strong progress in R&D with the submission of five new products and also in the tight control of our costs."
Reflecting this optimism, the company also said it would seek opportunities for mergers and acquistions, as Reuters notes. "We will continue to search for bolt-on acquisition around the world," Viehbacher told reporters during a conference call, as quoted by the news service.
"Sanofi is in the midst of its patent cliff," wrote Jack Scannell and other analysts at Sanford C. Bernstein in a note, as quoted by Bloomberg. It was a "solid, quiet quarter."
However, still facing generic competition and other business challenges, Sanofi this week disclosed it will close a research building in Bridgewater, NJ, as part of a consolidation of its U.S. operations. In addition, it will scale back its U.S. sales force and consolidate administrative services into a single Bridgewater office, the Star-Ledger reports. A company spokesman said it was too early to predict how the drugmaker's NJ workforce will be impacted.
The company will move drug discovery and early development to a hub in Boston, where Genzyme is located. The Bridgewater research building is slated to be shuttered by the end of 2012.
- read Sanofi's release
- see the Reuters story
- here's Bloomberg's take
- check out more from the Star-Ledger