Patent Expiries Delay Sanofi (France) (SAN.PA)'s Return to Growth
2/7/2013 7:58:29 AM
French drugmaker Sanofi said earnings could fall this year as it continues to feel the effects of expiring patents, disappointing hopes of a return to growth. The group, which saw earnings slide last year as cheaper generic rivals grabbed market share from some of its medicines, said on Thursday 2013 earnings would be flat to 5 percent lower than in 2012 at constant exchange rates. "The market was not expecting a decline this year," said Natixis analyst Philippe Lanone. "Sales trends are encouraging, but the 2013 earnings per share forecast is disappointing." Sanofi shares, which have gained about 25 percent in the last twelve months, were the worst performers in the European sector at 0945 GMT, down 3 percent at 67.27 euros. Drugmakers across the world have been struggling with patent expiries as well as cutbacks in healthcare spending by cash-strapped European governments. Britain's GlaxoSmithKline said on Wednesday it would cut costs in its struggling European drugs division. Sanofi has turned to emerging markets, vaccines, over-the-counter treatments, animal health and generics to lessen its reliance on branded medicines. These activities now account for more than 70 percent of sales and rose nearly 10 percent in 2012, Sanofi said, adding it remained on track to meet its medium-term targets. Deutsche Bank analysts said Sanofi was probably setting a conservative outlook for 2013. The performance of the company's growth platforms last year added "credibility to expectations of a return to growth in the second half of 2013 once patent losses have washed through," they said in a research note. The expiry of Sanofi's patent on anti-clotting drug Plavix, once the world's second-best selling prescription drug, is expected to slice around 800 million euros ($1.1 billion) off earnings in the first half Of 2013, Sanofi said.
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