Sanofi-Aventis 2nd-qtr profit falls as generics take toll on Eloxati and Ambien

Leading French pharmaceutical group Sanofi-Aventis disappointed investors, posting second-quarter 2007 results which were below consensus estimates. Moreover, its announcement of an up to 3.0 billion euros ($4.1 billion) share buyback program by next May and confirmation of its full-year guidance of adjusted earnings per share growth of 9% were not sufficient to enthuse and the firm's shares fell back 3.% to 59.19 euros in mid-morning trading on the day of the announcement, August 1.

The company reported sales of 6.94 billion euros for the quarter, a rise of 2.3% on a comparable basis but down 2% on reported terms. Turnover was impacted by new generic competition in the USA for its Ambien (zolpidem) and Eloxatin (oxaliplatin) in Europe, leaving net pharmaceutical revenue up just 1.2% at 4.29 billion euros. Making a strong contribution was the group's vaccines business, which generated sales of 619.0 million euros, an increase of 14.8% on a comparable basis.

Adjusted net income was 6.3% lower at 1.68 billion euros, with EPS 6.8% lower at 1.24 euros. R&D expenses were 1.1 billion euros, a rise of just 0.3% on the like period of 2006. With gross profit of 5.39 billion euros, the gross margin ratio was 77.7% versus 78.4%.