Sanofi blames health reforms for ailing profits

31st October 2006, Comments 0 comments

PARIS, Oct 31, 2006 (AFP) - French pharmaceutical group Sanofi-Aventis announced a fall in third-quarter sales and profitability on Tuesday, blaming fierce competition in the US and healthcare reforms in Europe.

PARIS, Oct 31, 2006 (AFP) - French pharmaceutical group Sanofi-Aventis announced a fall in third-quarter sales and profitability on Tuesday, blaming fierce competition in the US and healthcare reforms in Europe.

Shares in the company fell 4.60 percent to UER 65.35 on the Paris stock exchange in early afternoon trading in a slightly higher market.

The group, the third-biggest drug maker in the world, said that net profit fell by 11.6 percent from the figure for the third quarter of last year to EUR 1.7 billion.

Executive vice president of the group, Hanspeter Spek, called the results "less successful than any other quarter before".

A statement from the group explained that third-quarter drug sales had been "hit hard by the introduction of generics of four products in the United States and the effect of healthcare system reforms in France and Germany".

In the United States, sales of Plavix, a drug used to thin blood, plummeted 42.4 percent to 377 million euros compared with the same period last year following the launch of a generic rival by Canadian firm Apotex.

Global sales of the drug fell 19.7 percent.

A New York court has since blocked the sale of the generic, but did not order Apotex to recall already-shipped supplies of the product, which hit sales of the Sanofi product.

The other Sanofi drugs under pressure from cheaper generic drugs in the US include allergy treatment Allegra, diabetes treatment Amaryl, blood regulator DDAVP and rheumatoid arthritis treatment Arava.

In Europe, healthcare reforms in France and Germany have reduced social security repayments for some drugs.

Sanofi had better news for its anti-obesity drug Acomplia, however.

The French group said it had now submitted a complete application for authorisation in the US, where the group hopes it will become a best-seller.

The Food and Drug Administration, which regulates the drug market in the US, had asked for additional information on October 26.

Sanofi has said it hopes to get authorisation before the end of 2006, but analysts have suggested the launch date might be pushed back to the first quarter of 2007.

"We will not make any public statement before the reaction of the FDA," Spek said during a conference call.

The drug was launched first in Britain two months ago and has had "very positive feedback" from specialists, Sanofi said. It has since been launched in six other European countries, most notably Germany.

Among other financial results given by the group for the third quarter, operating profit fell 7.7 percent to EUR 2.48 billion. Sales fell by 0.4 percent to EUR 6.254 billion.

The net profit figure was at the top end of a range of analysts' expectations, according to a survey by financial news agency AFX News. Net profit had been expected at EUR 1.4-1.7 billion and operating profit at EUR 2.3-3.5 billion.

Copyright AFP

Subject: French news

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