Sanofi announced Friday that second-quarter net income slipped 11.1 percent year-over-year to 1.2 billion euros ($1.3 billion), hurt by lower sales of diabetes drugs and adverse currency effects. Revenue in the three-month period fell 5.1 percent to 8.1 billion euros ($9 billion), with sales of diabetes medicines dropping 6.6 percent to 1.9 billion euros ($2.1 billion).
CEO Olivier Brandicourt said the "performance was in-line with expectations and reflected anticipated headwinds." Sales of Lantus, which is facing generic competition, plunged 14.3 percent versus the year-ago period to 1.5 billion euros ($1.7 billion), although the figure beat analyst estimates. Brandicourt added that "the quarter was somewhat challenging" because of the currency crisis in Venezuela and the loss of patent protection on Plavix in Japan.
Meanwhile, sales of Praluent, which was developed with Regeneron Pharmaceuticals, reached 21 million euros ($23 million), almost doubling from the prior quarter. However, Berenberg Bank analyst Alistair Campbell said the figure was still below expectations of 25 million euros ($28 million), with the cholesterol lowering therapy continuing to suffer from payer restrictions in the US. Brandicourt suggested that he is "reassured by the latest US prescription trends," which indicate that Praluent is gaining ground, although the executive indicated that restrictions will continue to hit growth until the end of the year.
In other results, quarterly revenue in Sanofi's Genzyme unit jumped 15.1 percent to 1.5 billion euros ($1.7 billion), lifted by sales of the multiple sclerosis treatments Aubagio and Lemtrada. Further, sales of vaccines rose 2.6 percent to 797 million euros ($885 million), while revenue from consumer healthcare products fell 10.1 percent to 800 million euros ($889 million).
For the full year, Sanofi said that it still expects business earnings per share to remain "broadly stable" at constant exchange rates, "barring unforeseen major adverse events."
Commenting on the pursuit of Medivation, Sanofi said it's ready to act swiftly to reach a deal. "We have entered this new phase of our discussion with Medivation, which of course we expect will be much more productive," Brandicourt remarked. Earlier in July, Medivation rejected Sanofi's latest unsolicited takeover proposal valued at $58 a share in cash plus a contingent value right up to $3 per share tied to potential sales of the experimental PARP inhibitor talazoparib.
However, Medivation entered into confidentiality agreements with a "number of parties that have expressed interest in exploring a potential transaction," including Sanofi. "There is no certainty in terms of timing but we are ready clearly to move quickly," Brandicourt said, adding that the drugmaker will remain financially disciplined in the latest round of talks with Medivation.
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