Sanofi-Aventis pressured by US Plavix generic and European health reforms

Leading French pharmaceutical firm Sanofi-Aventis disappointed investors, despite an upbeat presentation of its financial results and R&D pipeline in Paris attended by the Marketletter, which showed that full-year 2006 net sales rose 4% (+3.9% on a reported basis) to 28.37 billion euros ($36.92 billion) and increased 8.4% (+4.0% as reported) to 7.36 billion euros for the fourth quarter.

Net profit for the full year was 7.04 billion euros, an increase of 11.1% on 2005, or 5.23 euros a share, up 10.3%, while for the fourth quarter, this was down 4.6% to 1.38 billion euros, or 1.02 share, 5.6% lower, as a result of health care reforms in Europe, particularly in France and Germany, and the impact of a generic version of its blockbuster anti-clotting agent Plavix (clopidogrel) flooding the US market (Marketletters passim).

Although these were not outstanding figures, they were still overshadowed by the news of a further delay in US Food and Drug Administration review of its weight-loss drug Acomplia (rimonabant; see details page 19) and patent woes for both Plavix and the antithrombotic Lovenox (enoxaparin; see page 2). These facts, plus a cautious 2007 guidance from new chief executive Gerard Le Fur of adjusted earnings per share (excluding special items) in the same order of magnitude growth as in 2007, and chief financial officer Jean-Claude Leroy warning that generic competition would make 2007 a difficult year, led to a sell-off in the firm's shares, which dipped 1.5% to 66.80 euros on the day of the news, February 13.