Sanofi reported a ‘difficult’ second quarter as a result of generic competition, problems at its Brazilian business and ‘commercial underperformance in certain business areas’.
Business net income fell 23.4% to €1.48bn, mainly owing to the loss of exclusivity on the blood thinner Plavix and the blood pressure treatment Avapro, as well as on deep vein thrombosis treatment Lovenox and cancer drug Eloxatin. Net sales dropped 9.8% to €8bn.
Plavix accounted for sales of €493m, down 1.3% in the second quarter, while Lovenox sales were down 9.2% to €436m. Avapro decreased 27.5% to €238m, reflecting generic competition in Western Europe where sales decreased 45.3% to €94m. Eloxatin sales fell 83.7% to €60m.
There was brighter news in some segments. Diabetes, for example, recorded double-digit sales growth (+16.2% to €1.62bn), led by Lantus (+17.7%), while vaccines, led by polio/pertussis and hib products (+12.5%) rose by +0.4% to €760m and Genzyme, led by enzyme replacement therapy Fabrazyme (+28.4%), increased by +25.6% to €525m.
Excluding Brazil, sales in emerging markets totalled €2.7bn, a fall of 2.3%.
First-half sales for the pharmaceuticals business reached €13.5bn, a decrease of 5.7%. Again, Sanofi said the drop was mainly due to generic competition.
If I look at all that it obviously doesn’t make for a pretty quarter, but I don't think anything fundamental has changed about the business
Commenting on the firm’s performance, Chief Executive, Christopher Viehbacher, said: ‘There is no point sugar coating it. I think this was indeed a frustrating quarter. We had some businesses clearly underperforming and some setbacks in the quarter.
‘We saw an underperformance in Japan, where there has been a move by the government to increase generic utilisation and, of course, we had mess to clean up in Brazil.
‘If I look at all that it obviously doesn’t make for a pretty quarter, but I don't think anything fundamental has changed about the business. I still believe we have a very strong, vibrant leadership position in emerging markets; our diabetes business is doing well; and we are getting some new products out.
‘We now need to just buckle down and get through this and we should still be able to get through the second half coming back into growth.’
