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Doubts over pipeline cloud Aventis results

Published on 31/10/03 at 11:16am

Aventis may struggle to replace revenue from its ageing blockbusters despite a strong performance in the second quarter, according to analysts.

The company recorded total second quarter sales growth of nearly 7%, with impressive increases in particular from osteoporosis treatment Actonel (64%) and Lantus (81%), which became the US insulin market leader.

But a worsening cash flow and a greater than expected 12% drop in sales for its older products are a long-standing concern.

Deutsche Bank has lowered its ratings to 'hold' because of uncertainties over generic competition for Allegra and Lovenox and the potential of the company pipeline.

Both Allegra and Lovenox are facing generic competition by 2005, threatening the E3.5 billion the company earns from the products.

The company says new products in its late stage pipeline, which it expects to file by the end of the year, will help bolster its position.

Alvesco, an inhaled corticosteroid for children and adults co-developed with Altana is now ready for submission in the US, while targeted cancer treatment Genasense has now completed phase III studies.

Meanwhile, Menactra the first quadrivalent conjugate vaccine to prevent meningococcoal meningitis, is planned for FDA submission by the end of 2003,

A new paediatric combination vaccine against five diseases Pentacel is planned for submission in 2004, and the company is seeking three further US and European indications for Taxotere in breast cancer, prostate cancer and gastric cancer.

Despite this, Deutsche Bank say investors will continue to worry about the strength and depth of the pipeline, with the company not planning an R&D day until 2004.

"The age-old issues of Allegra's growth slowdown and potential genericisation appear unlikely to be overtaken by a renewed optimism on new product driven long-term growth", an analyst said.

Aventis' novel antibiotic Ketek has performed well in global markets, but is still awaiting US approval after FDA requests for further trial data. The company says the drug remains on track for an early 2004 approval.

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