PARIS, Oct 28 (Reuters) - French drugmaker Sanofi stuck to its full-year profit forecast but posted weaker-than-expected quarterly sales on Tuesday, blaming pricing pressures on its lucrative diabetes business that it warned would drag on throughout next year.
Sanofi’s business net income, which excludes items such as amortisation and legal costs, rose 9.4 percent to 1.935 billion euros ($2.46 billion) on sales of 8.781 billion, putting business EPS at 1.47 euros per share.
This compared to average forecasts for EPS of 1.47 euros on sales of 8.86 billion in a company-provided poll of 14 analysts.
Chief Executive Chris Viehbacher declined to comment on newspaper reports that the chairman of the board was seeking to replace him, only saying he was focused on his job and that his transformation of Sanofi since he took over six years ago had had the board’s support.
Sanofi has sought in recent years to offset the impact of patent losses on big-selling drugs, such as blood thinners Plavix and Lovenox, by betting on harder-to-copy biotechnologies, over-the-counter treatments and animal health.
But one of its key “growth platforms”, diabetes, sharply slowed down over the quarter amid tough pricing pressures in the United States. Sanofi warned that the impact was set to last and that the unit’s sales would be “broadly stable” next year.
The diabetes franchise saw quarterly sales rise 8.3 percent at constant exchange rates when these had over the past quarters consistently recorded double digit growth and were still up 16.2 percent in the second quarter.
Sales of Lantus, the world’s most prescribed insulin and Sanofi’s top-selling treatment, posted growth of just 5.8 percent over the quarter, to 1.04 billion euros. This compared to 16.3 percent growth over the second quarter.
Sanofi said it had recently concluded negotiations with healthcare payors in the United States and had managed to secure business only through significant rebates as it faced aggressive discounting from competitors.
However, it maintained its forecast for EPS to grow 6-8 percent this year and said it expected to offset the tough competition in 2015 through the launches of a longer-acting version of Lantus, called Toujeo, and of an inhaled insulin therapy called Afrezza.
Sales grew 24.6 percent at Sanofi’s rare diseases unit Genzyme and its vaccine division recovered from a supply glitch last year, posting a 11.2 percent rise in sales, helped by strong sales of flu vaccines.
At constant exchange rates, sales in emerging markets - which account for over a third of Sanofi’s revenue - rose 7.6 percent, driven by Africa and Asia, and 7.2 percent in the United States. They returned to growth in Western Europe, where they were up 3.1 percent. (1 US dollar = 0.7870 euro) (Reporting by Natalie Huet; Editing by Andrew Callus)