Sanofi-Aventis Lifts Outlook as Q3 Profit Rises
From Associated Press (October 28, 2010)
PARIS -- French pharmaceutical company Sanofi-Aventis SA said Thursday its net profit rose 13 percent in the third quarter thanks to strong demand in emerging markets and acquisitions in the consumer health care field.
Sanofi-Aventis reported net profit of (EURO)1.6 billion ($2.2 billion), up from (EURO)1.4 billion a year earlier. Sales rose 5.7 percent to (EURO)7.8 billion, as a stronger dollar offset weaker sales of core brands like the anticlotting drug Lovenox and blood thinner Plavix.
The company, based in Paris, now expects core earnings to grow between 0 and 2 percent this year at constant exchange rates, compared with a previous forecast of a decline of between zero and 4 percent.
Sanofi-Aventis shares gained on the news, rising 1.3 percent to (EURO)50.15 in early trading on the Paris stock exchange.
These core earnings, which Sanofi-Aventis calls business earnings per share, were up 6 percent at constant exchange rates in the nine months to September.
Chief Executive Christopher Viehbacher said the company was on track to achieve more than the targeted (EURO)1.2 billion in cost savings this year.
In a conference call with reporters, Viehbacher also defended Sanofi-Aventis' $18.5 billion takeover bid for U.S. biotechnology firm Genzyme Corp.
"Our (EURO)69 cash offer is extremely compelling," Viehbacher said, "and nothing in what Genzyme has said in recent weeks would cause us to change our offer."
Last week Genzyme said its own forecast for 2011 earnings made it worth (EURO)89 a share.
Genzyme is currently in a tussle with Sanofi-Aventis after the French drug developer initiated a hostile takeover bid which Genzyme's board has voted unanimously to recommend that shareholders reject. Sanofi-Aventis initially made the offer privately in July, then repeated it publicly in late August, but was rebuffed by Genzyme's board twice.
Viehbacher also said that he'd had "no recent contact" with Genzyme CEO Henri A. Termeer, but that he's "hoping to hear from him."
The buyout offer for Genzyme closes Dec. 10.
Sales of Sanofi-Aventis' core pharmaceuticals, which includes blockbuster injected anticlotting drug Lovenox and blood thinner Plavix, the world's second bestselling drug, continued to suffer from generic competition in the third quarter. Sales of the company's 15 flagship drugs fell 3.5 percent to (EURO)6.6 billion.
Like other major international pharmaceutical companies, Sanofi has increasingly been making deals to acquire small companies or rights to promising experimental drugs. The moves are aimed at offsetting inadequate progress from internal research programs and looming revenue declines as blockbuster drugs face generic competition.
Since he became Sanofi's CEO in December 2008, Viehbacher has arranged dozens of mostly mid-sized acquisitions. Those include a $1.9 billion March deal in which the company bought Tennessee-based Chattem Inc., maker of Gold Bond skin products and Icy Hot pain relief packs, in a strategy to expand its U.S. health care business.
Sanofi-Aventis is the world's fourth-biggest pharmaceutical company, with 2009 revenue of about $35.5 billion. Genzyme booked 2009 net income of $422.3 million on revenue of $4.52 billion.
Posted: October 2010