Sanofi 4Q overshadowed by impending legislation
in sales for the fourth quarter with its vaccine business
continuing to impress. The company's performance precedes two
upcoming decisions later this year that will greatly impact its
financial future.
Forth quarter sales rose 4.8 per cent at €7 billion, despite competition from generics for Allegra. The figure, which was slightly below analyst's estimates, was also due to lower-than-expected sales for certain drugs.
The antihistamine, which since September has faced competition from generics in the US, generated net sales of €193 million, (€160 million) - down 58.5 per cent, including $105 million, (€87 million) - down 72.2 per cent in the US.
Full-year sales of the drug dropped 9 per cent to $1.62 billion. The real damage took place in the fourth quarter as sales plunged 59 per cent to $193 million.
The generically-challenged diabetes drug Amaryl was up 1 per cent to $818 million for the year, but fourth quarter sales sank by 29 per cent to $163 million.
An authorised generic version of the product was launched in the US by Prasco Laboratories in September 2005, this version accounted for 42.8 per cent of generic fexofenadine prescriptions in December 2005.
Sanofi's performance this quarter and indeed this year, will take a back seat to two impending decisions that could well determine the company's future performance in terms of share price for the next five-ten years.
Accomplia, Sanofi's treatment for obesity and smoking addiction has been hailed by the medical community as the most promising late-stage pipeline product. The big test occurs next month as the US Food and Drug Administration (FDA) decides to grant conditional approval
A favourable FDA decision for Acomplia means the drug could be on the market during the second quarter. The European Union is expected to also make its decision a few months later on a drug that could reach worldwide sales of $5.3 billion by 2010.
Sanofi also have to contend with a pending lawsuit in April, which aims to prevent another company from producing a generic version of its anticoagulant drug, Plavix, the company's second best seller.
Senior analysts have commented on the fallout of a decision in favour of Sanofi. The ruling would mean five more years of patent protection for a drug that produced $2.45 billion of sales for Sanofi-Aventis and $3.82 billion for Bristol-Myers Squibb, its partner in the drug's production.
The FDA had recently allowed the Canadian company Apotex to sell generic Plavix, but analysts doubt Apotex will act until the court has ruled, or settled with Sanofi-Aventis.
Other market analysts have been less positive predicting that the FDA may grant approval for Acomplia, on condition that the FDA might require Sanofi to employ a risk management program to monitor patient safety. This could delay the drug's initial uptake and launch
Sanofi's human vaccines business jumped 50 per cent to $776 million in the fourth quarter and increased 27 per cent to $2.49 billion for 2005.
"The US flu season was the most successful in its history as it sold 64 million doses of vaccine. Flu-vaccine revenue represented about one-third of total vaccine sales last year," the company said in explaining these results.
The company saw sales for its blood thinner Lovenox rise by 14 per cent last year to $2.59 billion. Most impressive was the company's Lantus insulin. Sales increased by 47.5 per cent to $1.47 billion.
Eloxatin, for colorectal cancer, gained a 31 per cent increase in sales to $1.89 billion.
The company ended the year with 10 drugs each producing more than $1 billion in sales. Eight of those drugs posted gains ranging from 10.6 per cent to 47.5 per cent between 2004 and 2005.
