Generics force Sanofi into standstill
pharmafile | February 9, 2011 | News story | Sales and Marketing |Â Â 2010 pharma results, Jevtana, Multaq, Sanofi, Sanofi-Aventis, genericsÂ
An onslaught of generic competition combined with healthcare cuts in the US and Europe meant Sanofi-Aventis’ revenues were brought to a standstill in 2010.
The company has warned investors that 2011 will be a rougher ride, forecasting its earnings will see a 5-10% decline.
Full year figures for 2010 show revenues fell back 0.8%, as Lovenox, Plavix, Taxotere and Eloxatin all suffered as generic competitors took sales away from the blockbuster brands.
Plavix’s patent remains in place in the US until 2012, but rapid erosion is already underway in Europe, where sales dropped 49 per cent.
The company’s saving grace was insulin product Lantus, which continued its strong growth trajectory, with a 9.1% increase in revenues compared to the previous year.
“2010 was the first year in which the patent cliff really became visible with generic competition for several of our products, notably Lovenox in the US,” said Sanofi-Aventis chief executive Christopher Viehbacher.
The company managed to counteract falling sales with new cost savings, and produced a 2.6% increase in profits and a 2.6% increase in earnings per share at constant exchange rates.
He added: “However, we have delivered another year of EPS growth due to the excellent performance of our growth platforms, which now account for 54% of sales, and tight cost control. In 2010, these growth platforms accounted for more than €16 billion in sales, an increase of 12.5%, constituting a solid basis for the mid and long term development of our company.”
The performance of new products in 2010 brought some cause for optimism. The company’s atrial fibrillation treatment Multaq in its first full year on the US market reached sales of €172 million ($235m) of which €128 million was generated in the US.
Fourth quarter sales also saw an encouraging lift, rising to €63 million, but the drug’s outlook was dealt a blow in January when the FDA demanded it carry new warnings of potential side effects, after two patients suffered acute liver failure after taking the drug.
The product is now available in all major European countries, having been launched in Spain and Italy in September and France at the end of October.
There was promising news from new chemotherapy treatment Jevtana, which exceeded expectations in the first six months after its launch. The treatment for metastatic hormone refractory prostate cancer following chemotherapy earned US sales of €82 million.
Jevtana (cabazitaxel injection) is licensed for use in combination with the steroid prednisone to treat men with prostate cancer after treatment with Sanofi’s Taxotere. It is also is the first treatment to be licensed for use after hormone treatment and Taxotere fail, making it a useful addition to the area.
The company also saw strong growth in its generics (41%) consumer health (45%) thanks to organic growth and new business acquisitions. The company’s vaccines business enjoyed a record year of growth (33%), led by a strong performance in seasonal flu vaccines. The company’s small animal health division saw a modest decline in sales, down 1.2 per cent.
Genzyme talks still on-going
Chief executive Chris Viehbacher confirmed that Sanofi was still in takeover talks with US biotech company Genzyme, which has been resisting the acquisition since July.
Viehbacher called the deal “strategically sensible” and said it would offer “very interesting synergies”.
The company is expected to raise its offer for the company above the current $18.5 billion, but just how much further it goes will depend on the due diligence it’s conducting, particularly around the MS drug Lemtrada.
Andrew McConaghie
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