French drug maker Sanofi (SNYNF.PK,SNY) Wednesday reported a lower profit for the third quarter, hit by vaccines shortage in the U.S., market slowdown in China and troubles to the generics business in Brazil.
However, sales improved marginally on a currency-neutral basis as the impact of the patent cliff ended in August. For the full-year 2013, the company is now expecting earnings to be at the lower end of previous guidance range.
Net income attributable to equity holders of Sanofi declined to 1.213 billion euros ($1.67 billion) from 1.539 billion euros in the previous year. Prior-year results have been restated.
Excluding items, business net income totaled 1.35 per share, while it was 1.67 per share last year.
Net sales declined 6.7 percent to 8.432 billion euros from 9.040 billion euros in the prior year. Sales atconstant exchange rates rose 0.6 percent, marking the first increase in five quarters.
Sanofi's CEO Christopher Viehbacher said, "The third quarter marks an inflection point for Sanofi as the impact of the patent cliff ended in August. As a result, we returned to sales growth in September. Our growth platforms grew 5.5% in the third quarter despite the shortage of pertussis-containingvaccines in the U.S. until mid-October, the impact of the market slowdown in China and our recovering generics business in Brazil.''
Sales of the growth platforms advanced 5.5 percent to 6.298 billion euros, comprising 74.7 percent of total sales. Sales comparisons exclude the impact of currency.
Diabetes saw an over 20 percent increase in sales with Lantus' sales climbing 21.2 percent. A 9.8 percent growth was witnessed in Consumer Healthcare owing to the launch of Rolaids in the U.S. and the improvement of the CHC business in China.
Genzyme sales increased more than 21 percent, driven by the 11.1 percent growth of the rare disease franchise and the launch of Aubagio.
Animal Health saw a sales decline of 7.2 percent due to increased competition to Frontline. In September, the FDA approved NexGard, a new chewable anti-parasiticide for the treatment and prevention of fleas and ticks in dogs.
Vaccine sales in the quarter fell 6.4 percent, hurt by supply limitations of Pentacel and Adacel in the U.S. and the quarterly phasing of U.S. flu vaccines sales. Sanofi expects record flu sales in the Northern Hemisphere in the second half, resulting from its differentiated vaccines offerings.
Geographically, sales improved 5.2 percent in the U.S., with significantly lower impact of the patent cliff and strong performances from Diabetes, Genzyme and CHC.
Emerging Markets sales improved 2.8 percent to 2.652 billion euros and were impacted by lower growth in the Chinese pharmaceutical market and lower sales of Brazil generics.
Third-quarter sales of Generics slid 5.4 percent to 424 million euros, affected by reduced sales in Brazil.
Considering the expected return to growth in the fourth quarter and including the impact of extended vaccines shortage in the third quarter, the outlook for 2013 is now expected to be at the lower end of previous guidance range. The previous forecast was for earnings per share to be 7 percent to 10 percent lower than 2012 at constant exchange rates, barring major unforeseen adverse events.
Business earnings per share is estimated to be around 10 percent lower than 2012 at constant currency rates, barring major unforeseen adverse events
Sanofi closed at 75.70 euros on Tuesday.
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