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* Sees 2013 business EPS flat to 5 pct lower than in 2012
* Q4 business net income down 24.3 pct to 1.57 bln euros
* Q4 sales up 0.2 pct to 8.53 bln euros
* Shares fall 3.3 percent (Adds analyst comment, details, background, shares)
By Elena Berton
PARIS, Feb 7 (Reuters) - French drugmaker Sanofi said earnings could fall this year as it continues to feel the effects of expiring patents, disappointing hopes of a return to growth.
The group, which saw earnings slide last year as cheaper generic rivals grabbed market share from some of its medicines, said on Thursday 2013 earnings would be flat to 5 percent lower than in 2012 at constant exchange rates.
"The market was not expecting a decline this year," said Natixis analyst Philippe Lanone. "Sales trends are encouraging, but the 2013 earnings per share forecast is disappointing."
Sanofi shares, which have gained about 25 percent in the last twelve months, were the worst performers in the European sector at 0945 GMT, down 3 percent at 67.27 euros.
Drugmakers across the world have been struggling with patent expiries as well as cutbacks in healthcare spending by cash-strapped European governments. Britain's GlaxoSmithKline said on Wednesday it would cut costs in its struggling European drugs division.
Sanofi has turned to emerging markets, vaccines, over-the-counter treatments, animal health and generics to lessen its reliance on branded medicines.
These activities now account for more than 70 percent of sales and rose nearly 10 percent in 2012, Sanofi said, adding it remained on track to meet its medium-term targets.
Deutsche Bank analysts said Sanofi was probably setting a conservative outlook for 2013. The performance of the company's growth platforms last year added "credibility to expectations of a return to growth in the second half of 2013 once patent losses have washed through," they said in a research note.
The expiry of Sanofi's patent on anti-clotting drug Plavix, once the world's second-best selling prescription drug, is expected to slice around 800 million euros ($1.1 billion) off earnings in the first half Of 2013, Sanofi said.
Still, Chief Executive Chris Viehbacher remained upbeat.
"As of Jan. 1, Sanofi is really a new company with a completely different set of sales and a different structure," he told reporters.
Sanofi, which aims to have 18 new drugs on the market by 2015, has also been making inroads with new prescription drugs.
This year, diabetes treatment Lyxumia and Zaltrap, a therapy for advanced bowel cancer, were approved in Europe, while Kynamro, which treats a rare form of high cholesterol, received the green light from U.S. regulators.
Multiple sclerosis pill Aubagio, one of two such treatments Sanofi is betting on to drive future growth, reached sales of 7 million euros in the fourth quarter, the company added.
In an update on its drugs pipeline, Sanofi said it would start testing two so-called "biosimilar" insulin products by this quarter as it seeks to broaden its diabetes portfolio.
But it also faced a setback as a combination of insulin Lantus and new diabetes treatment Lyxumia will not start late-stage trials in 2013 due to problems with the injecting device.
Business net income, which excludes items such as amortisation and legal costs, declined 24.3 percent to 1.57 billion euros ($2.1 billion) in the fourth quarter.
The fall would have been even steeper without a favorable tax rate in the quarter, analysts said.
Sales rose 0.2 percent to 8.53 billion euros as the impact from austerity measures in Europe and generic competition offset favourable currency moves and growth from rare disease unit Genzyme.
The impact from government cutbacks on Sanofi's earnings last year totalled 300 million euros and is expected to reach the same level in 2013, Viehbacher said.
Sanofi had been expected to post quarterly business net income of 1.54 billion euros on sales of 8.56 billion, according to Thomson Reuters I/B/E/S estimates.
$1 = 0.7387 euros Additional reporting by Noelle Mennella in Paris; Editing by Christian Plumb and Mark Potter