Sanofi, France's largest drugmaker, reported a larger-than-expected, 34 per cent, decline in first-quarter profit, crimped by generic competition to three key medicines in the US.
Profit, excluding some costs, fell to €1.61 billion, or €1.22 a share, from €2.42 billion, or €1.83, a year earlier.
“It’s a poor start to the year,” Alistair Campbell, an analyst at Berenberg Bank in London, wrote in a note to clients today. “There is little to cheer in the numbers.”
Chief executive Chris Viehbacher has sought partnerships and acquisitions to replenish Sanofi's drug pipeline and make up for the revenue losses caused by generic competition to the Plavix blood thinner and other top-selling products.
The first three months of the year were "a milestone quarter for Sanofi", chief financial officer Jerome Contamine said in a interview posted on the company's website. "It's the last quarter we are seeing such a significant impact of the patent cliff."
Revenue slipped 5.3 per cent to €8.1 billion in the first three months of the year.
Generic competition wiped out €553 million of sales during the first three months of the year, Sanofi said. In the first half, cheaper copies of its medicines will probably lead to a total of €800 million in lost profit, it added.
Separately yesterday, Shire, the world's largest seller of attention-deficit drugs, cut its full-year sales forecast after first-quarter revenue missed analysts' estimates, partly because of increased competition from Sanofi.
Shire said it expects sales to grow by a percentage in the mid-to-high single digits, compared with an earlier forecast of low double-digits. Sales in the quarter were $1.16 billion, the Dublin-based company said in a statement. Flemming Ornskov, who took over yesterday as chief executive officer from Angus Russell, said he plans to pursue long-term growth that is above the industry average. – (Bloomberg )