PARIS Sanofi reported lower-than-expected first-quarter earnings on Thursday as the effects of last year's patent losses and foreign exchange headwinds crimped growth from diabetes drugs, vaccines and rare disease unit Genzyme.
But the French drugmaker said it expected to return to growth in the second half of the year and confirmed that annual profit would be flat to 5 percent lower than in 2012 at constant exchange rates.
"We are in the last quarter of the patent cliff ... The numbers, when you look at them, really reflect the history, but I think it's the future of the company that is particularly exciting," Chief Executive Chris Viehbacher told reporters.
Sanofi's closely watched business net income, which excludes items such as amortization and legal costs, dropped 33 percent to 1.61 billion euros ($2.1 billion) on sales of 8.06 billion, down 5.3 percent.
Sales were hit by generic competition, austerity measures in Europe and the depreciation of several currencies, including the dollar and the Japanese yen, against the euro.
Sanofi had been expected to post quarterly business net income of 1.75 billion on sales of 8.3 billion, according to a Thomson Reuters poll.
In February Sanofi disappointed investors' hopes it would return to growth at the beginning of this year.
The expiry of Sanofi's patent on anti-blood clotting drug Plavix, once the world's second-best selling prescription drug, is expected to slice around 800 million euros off earnings in the first half of 2013, Sanofi said.
Drugmakers across the world have been struggling with patent expiries as well as cutbacks in healthcare spending by cash-strapped European governments.
Pfizer Inc reported much lower-than-expected first-quarter sales on Tuesday, hurt by weak demand for its Prevnar 13 vaccine used to prevent pneumonia and other infections, and it trimmed its 2013 profit forecast.
Merck & Co Inc reported a surprising drop in quarterly sales of diabetes medicine Januvia, its biggest product and a frequent driver of quarterly earnings, and the drugmaker cut its full-year profit forecast on Wednesday.
Sales in emerging markets, one of Sanofi's priorities to drive growth along with diabetes and rare disease treatments, reached 2.72 billion, an increase of 6.5 percent, and accounted for 33.7 percent of group sales.
Sales of Aubagio, a multiple sclerosis pill that was approved in the U.S. last September and is part of Sanofi's ambition to become a major player in this therapeutic area, reached sales of 20 million in the first quarter.
Sanofi also said two new members will join its executive committee on July 1 following the retirement of Hanspeter Spek, Sanofi's head of global operations.
Peter Guenter will be head global commercial operations, while Pascale Witz will be in charge of global divisions and strategic commercial development.
Sanofi shares, which have gained around 11 percent this year, closed at 52.87 euros, giving it a market capitalization of 110.4 billion euros.
($1 = 0.7580 euros)
(Reporting by Elena Berton; Editing by Leila Abboud)
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