October 30, 2009 / 6:36 AM / 10 years ago

UPDATE 3-Sanofi lifts forecast on swine flu vaccine

* Lifts EPS forecast by 1 percentage point

* Expects H1N1 flu vaccine Q4 sales of abt $500 million

* Q3 adj EPS rises 16.3 percent, beats consensus

* Q3 sales rise lower-than-expected 8 percent

* Expands over-the-counter business, buying Oenobiol (Adds swine flu context, stock action)

By Caroline Jacobs

PARIS, Oct 30 (Reuters) - Leading vaccine supplier Sanofi-Aventis (SASY.PA) raised its outlook for 2009 thanks to surging sales of swine flu innoculations, the latest drugmaker to see a boost to results from the pandemic.

The French company posted third-quarter earnings per share that beat forecasts as competition from generics was offset by revenue growth for other drugs.

Sanofi expected H1N1 vaccines to add about $500 million to its sales in the fourth quarter, up from $78 million in the recently ended quarter, as it begins to see results from its first shipments into the U.S. market.

It indicated sales would continue “at a similar rate” until into the first quarter, the two periods when most vaccine shipments are expected to take place.

But while the French drugmaker has upward of a 40 percent share in the market for seasonal flu vaccines, Sanofi ranks behind some competitors in the market for swine flu preventions and treatments. [ID:nLU555300]

GlaxoSmithKline (GSK.L) and AstraZeneca (AZN.L) have both said they were in line for a boos from H1N1 vaccine sales earlier this week.

Sanofi on Friday predicted adjusted earnings per share excluding items for the final quarter of this year would grow by around 11 percent at constant exchange rates instead of around 10 percent beforeare.

“We will see quite a big bonus of sales (in the fourth quarter) of H1N1 and seasonal flu,” Sanofi Chief Executive Chris Viehbacher said at a conference call. Sales of seasonal flu vaccines will take off in the fourth quarter this year.

Shares of Sanofi were little changed in afternoon trading in Paris, down 35 cents to 50.54 euros.

EPS in the third quarter beat expectations, increasing 16.3 percent to 1.71 euros, in part thanks to continued cost cutting. The average outcome of a Reuters poll among 15 analysts was for EPS of 1.61 euros. Sales just missed consensus, up 8 percent at 7.4 billion rather than 7.44 billion.

For now, it is unclear how the worldwide spread of H1N1 will continue and last, but Viehbacher said that strain of flu could be a factor until April.

“I would see us continue to sell more or less at the same rate into 2010, at least up until late spring,” he said. “Beyond that it is difficult to see if the pandemic will continue.”

Sanofi is awaiting European Union regulatory approval for two versions of its H1N1 flu vaccine, expecting clearance for the Panenza vaccine in the next couple weeks and for the Humenza adjuvented, or booster-type, vaccine by mid-December.

Extra revenues from swine flu vaccines will only temporarily help Sanofi’s battle to overcome a loss of about a fifth of its revenues in the next years due to patent expiries on blockbuster drugs, making way for cheaper copies from generic drugmakers.

Third-quarter sales growth, pulled by anti-thrombosis drug Lovenox, insulin Lantus, as well as vaccines, was partly held back by competition from generics to Sanofi’s cancer drug Eloxatin in the United States in August and blood thinner Plavix in Europe. Eloxatin sales fell 44 percent.

Sales of irregular heart beat drug Multaq, touted by Sanofi and analysts as a blockbuster, were 13 million euros. The drug has been available for eight weeks in the United States and is awaiting EU marketing approval. So far prescriptions and reactions to Multaq were “very encouraging”, Sanofi said.

“Most (analyst) forecasts I’ve seen strike me as being reasonable forecasts,” Viehbacher said. “I think you can certainly say this will be a major product for the company.”

Consensus estimates from analysts for Multaq peak sales range from 1 billion to 1.5 billion euros.

Analysts welcomed Sanofi’s earnings performance, while the EPS upgrade for the year had been expected.

“Solid growth that was driven by surprisingly strong sales of Sanofi’s key products Lantus and Lovenox, cost savings and positive currency effects,” DZ Bank analyst Thomas Maul said in a research note, rating the shares “buy”.

“In our view Sanofi-Aventis is reacting in an ideal manner to the forthcoming “years of patent expiries” with the efficiency-enhancing measures it has launched, the recent acquisitions and its efforts to develop into a broadly-based healthcare group.”

As part of Sanofi’s aim to diversify its business, it said on Thursday it was expanding its over-the-counter-drugs, buying French nutritional beauty supplements maker Oenobiol. Oenobiol sales reached 57 million euros so far this year. No financial details were disclosed.

Net debt increased to more than 5 billion euros at the end of September from 1.8 billion at the end of 2008 following a string of acquisitions, such as generic drugmakers in Latin America, biotech company Shantha and the buy-out of animal healthcare company Merial.

Reporting by Caroline Jacobs; Editing by Lincoln Feast, John Stonestreet

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