PARIS (AP) – Sanofi-Aventis SA saw its earnings fall by nearly 30 percent in the first quarter as low swine flu vaccine sales battered the French drug maker’s bottom line.
The world’s fourth largest prescription drug maker by sales said in a statement it made €1.2 billion ($1.8 billion) net profit in the January-March quarter, down 29 percent from €1.7 billion a year earlier, when swine flu vaccine sales gave a boost to earnings.
Sanofi-Aventis warned earlier this year that it expected a 5 to 10 percent drop in a core measure of its earnings this year due to the combined wallop of U.S. health care reform, EU austerity measures and increased competition from less expensive generic drugs.
The company said it will review this forecast in July, after that core earnings measure fell by an even greater 10.8 percent in the first quarter.
Sanofi-Aventis, maker of the world’s second-biggest selling medicine, the blood-thinner Plavix, said sales stagnated in the first quarter under competition from cheaper generic challengers to Plavix and other drugs, including Lovenox, Taxotere and Ambien CR.
Sales fell 1. 5 percent to €7.8 billion in the period, despite a strong showing by Sanofi-Aventis’ diabetes division. Lantus, the company’s top selling insulin brand for diabetes, reported a 13 percent sales jump to €925 million in the quarter.
Genzyme, the Cambridge, Massachusetts-based maker of high-priced biotech drugs that Sanofi-Aventis bought for $20.1 billion earlier this month, said it’s own sales rose 7 percent to $1 billion in the first quarter.
Experts say the merger reflects the current landscape of the pharmaceutical industry, as companies seek to replace older medications that have lost their patent protection.
By the end of 2011, medications worth more than $30 billion in annual sales industrywide will begin competing with low-cost generic drugs. Many of these drugs, developed in the 1990s, treat common diseases like arthritis, diabetes and asthma. Sanofi’s blood thinner Plavix, the second-best selling drug in the world, loses patent protection in 2012.
Compared with these pill-based drugs, Genzyme’s high-tech injectable drugs are virtually immune to generic competition. Not only are they extremely difficult to manufacture, but they enjoy extra patent protections awarded to encourage development of specialty medications.
Date: April 28, 2011
Source: Associated Press