Wednesday, Sanofi-Aventis (SNY) posted a 19% growth in first-quarter profit, and confirmed its 2009 forecast for adjusted earnings per share growth. In addition, the company said it has halted 14 of 65 projects from clinical development, including experimental medicines for sleep apnea and depression, to focus on the most promising projects and to reallocate resources to external R&D alliances.
Q1 Results
The company's first-quarter net income was EUR 1.58 billion, an increase of 19.1%, compared to EUR 1.33 billion in the year-ago quarter. Per share earnings grew 21% to EUR 1.21 from EUR 1.00 in the same quarter of last year.
On an adjusted basis, net income ascended 15.7% to EUR 2.18 billion from EUR 1.88 billion last year, and earnings per share grew 16.8% to EUR 1.67 from EUR 1.43 in the prior year quarter.
Quarter net sales advanced 2.5% on a reported basis to EUR 7.11 billion from the previous year's EUR 6.94 billion. At constant exchange rates and after taking account of changes in structure, net sales slightly fell by 0.2%, and excluding changes in structure and at constant exchange rates, net sales rose by 3.5%.
Other revenues were 21.1% higher, driven by a good performance from Plavix in the United States and the appreciation of the dollar.
Pharmaceuticals
The company's Pharmaceuticals business fetched first-quarter net sales of EUR 6.48 billion, down 1.0% from the previous year.
Net sales of the leading low molecular weight heparin on the market, Lovenox, improved modestly by 1.3% to EUR 762 million, largely due to abnormally high sales in the United States that rose 23.3% during the first quarter of 2008, when wholesalers placed large orders for the product in response to the withdrawal from the market of some unfractionated heparins.
Lantus, insulin brand, generated first-quarter net sales growth of 27.1% that amounted to EUR 747 million, driven by the Lantus SoloSTAR injection pen. Lantus experienced significant growth in all three regions - 30.3% in the United States, 14.9% in Europe, and 43.5% in Other Countries. Sanofi-Aventis stated that this performance keeps the company on track for achieving its goal of doubling net sales of Lantus by 2012.
Net sales of the rapid-acting insulin analog Apidra rose by 42.9% to EUR 31 million, while net sales of Taxotere increased by 8.3% to EUR 534 million, boosted by its use in adjuvant breast cancer treatment and in prostate cancer, and net sales of Eloxatin, the cytotoxic agent in the colorectal cancer market, as an adjuvant and as first line treatment in the metastatic phase, were up 3.0% at EUR 266 million in the United States.
In the United States, sales of Plavix, which are consolidated by Bristol Myers Squibb, witnessed an increase of 13.6%. In Europe, sales were steady despite competition from clopidogrel besylate in the monotherapy segment in Germany, where Plavix/Iscover still had volume market share of around 70% in March 2009. Plavix in Japan continued to generate solid growth with net sales up 90.2% at EUR 70 million.
Human Vaccines
First-quarter net sales for the Human Vaccines business advanced 9.1% to EUR 627 million. Net sales in the United States were 2.6% higher at EUR 352 million.
Polio/Pertussis/Hib Vaccines posted sales growth of 33.9%, aided by the success of Pentacel, the first 5-in-1 pediatric combination vaccine against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b to be licensed in the United States. Pentacel fetched net sales of EUR 73 million, and Pentaxim continued to perform well in Other Countries with net sales up 48.2% at EUR 39 million.
Net sales of influenza vaccines rose sharply by 44.4% to EUR 63 million due to the favorable timing of shipments, which were mainly concentrated in the first quarter in the southern hemisphere. Net sales of meningitis/pneumonia vaccines amounted to EUR 116 million, while net sales of Menactra were down 13.2% to EUR 96 million due to a shrinking catch-up opportunity in the adolescent segment of the market. Filing for U.S. approval of Menactra Toddler is scheduled for the summer of 2009.
Adult booster vaccines generated first-quarter net sales of EUR 96 million, a decline of 12.7%, including EUR 61 million for the adult and adolescent tetanus-diphtheria-pertussis booster Adacel.
R&D Portfolio Review
In addition, the company noted that it has completed a comprehensive and rigorous review of its R&D portfolio. Following the review, the company has decided to discontinue saredutant, in phase III, on the basis of results from the study in association with escitalopram in depression. AVE5530 is halted in hypercholesterolemia due to insufficient efficacy, and the rights to TroVax are returned to Oxford BioMedica.
Further, the company said as regards vaccines, resources in the intercontinental zone will be reallocated to the hexavalent vaccine Hexaxim, with the UnifiveTM pentavalent project discontinued. In Phase II, Sanofi has halted the development of AVE0657 in sleep apnea, SSR180575 in diabetic polyneuropathy, AVE1642 in oncology, and the melanoma vaccine. The company has also halted six projects that were in Phase I.
Sanofi-Aventis would decode in the next few months whether or not to continue developing four products - AVE1625, xaliprodene, idrabiotaparinux and West Nile virus vaccine- primarily on the basis of results from clinical trials currently under way.
The company's portfolio now comprises 51 projects in clinical development, of which 21 are either in Phase III or have been submitted for regulatory approval. Vaccines represent 35% of the total, other biological products 14%, and external collaborations 27%.
The company added that the FDA Advisory Committee has recommended approval of Multaq to treat patients with atrial fibrillation on March 18. A new drug application is currently being reviewed in the European Union.
FY09 Forecast
Looking ahead, the company confirmed its expectations for 2009 adjusted earnings per share growth of at least 7% at constant exchange rates, excluding selected items, barring major adverse events.
Stock Quotes
Sanofi-Aventis shares, which have been trading between $23.95 and $39.68 in the past 52 weeks, closed Tuesday's trading session at $27.16, down 7 cents or 0.26%, on a volume of 2.19 million shares.
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