Sanofi-Aventis raised its earnings growth goal for this year and said new cost savings should result by 2013 in a net profit and sales level similar to 2008 as the French drugmaker grapples with patent expiries.
Sanofi beat consensus expectations for its second-quarter earnings on Wednesday when it raised its growth forecast for adjusted earnings per share (EPS) to around 10 percent at constant exchange rates from at least 7 percent.
Cost savings of 2 billion euros by 2013 as well as support from key growth drivers -- such as vaccines, diabetes products like Lantus and emerging markets -- should help Sanofi achieve a net profit and sales level similar to that in 2008. Net profit then was at 7.2 billion and sales at 27.6 billion.
Sanofi is pulling out all the stops to overcome a bleak set of years when several of its key drugs will lose their patent protection, making way for rivals to produce cheaper copies that the company has said could take out about a fifth of its sales.
Since Chris Viehbacher's appointment, the world's fourth-largest drugmaker by sales has closed a number of partnerships to discover new drugs, embarked on takeovers in generics and overhauled its research and development.
On top of the 14 products it had already slashed from its pipeline, Sanofi said it had ditched two more -- Phase II product AVE1625 and Phase III product xaliproden. On the other hand, four new drug candidates entered clinical development.
Sanofi said there had been no significant changes in the prescription of flagship drug Lantus following studies that linked the insulin with cancer. U.S. and European Union health regulators did not support the studies and a independent experts invited by Sanofi concluded the studies were flawed.
Sanofi's second-quarter net profit rose 29.4 percent to 2.3 billion euros, bolstered by 11.2 percent higher sales at 7.48 billion, beating Reuters consensus, as well as by contributions from acquisitions. Next to flagship diabetes drug Lantus, Sanofi's sales were bolstered by forecast-beating performance of four other key products, including blood thinner Plavix and cancer drug Eloxatin.
Those drugs, however, could face early generic arrivals.
A U.S. court in June cleared the path for cheaper copies to Eloxatin to appear and in May the European Medicines Agency gave the green light to six generic versions of Plavix, which is marketed by Bristol-Myers Squibb in the United States.
Sanofi shares closed at 46.98 euros on Tuesday.