Sanofi saw its earnings slump 41 percent in the second quarter from a year earlier as growing competition from generic alternatives ate into sales of its more expensive drugs and offset gains from the recent acquisition of U.S. biotechnology firm Genzyme.
The company revealed Thursday that its net profit fell to euro1 billion ($1.44 billion) in the second quarter from euro1.7 billion a year earlier. Sales of its anti-clotting drug Lovenox and breast and prostate cancer drug Taxotere fell sharply due to generic competition in the U.S.
Analysts estimate that between now and 2016, blockbuster drugs with about $255 billion in global annual sales are set to go off patent, decimating sales of brand-name drugs and slashing the cost to patients and American companies that provide health insurance benefits.
Sanofi acquired U.S. specialty drugmaker Genzyme Corp. in a $20.1 billion deal in April. Part of the purchase price was tied to Genzyme's successfully meeting sales and other targets, but Sanofi said Thursday it doesn't expect Genzyme to achieve the first of these so-called production milestones.
Genzyme's best-seller Cerezyme treats Gaucher disease, an enzyme disorder that can result in liver and neurological problems. Its second-best seller, Fabrazyme, treats an inherited disorder known as Fabry disease, which is caused by the buildup of a particular type of fat in the eyes, kidneys and nervous system.
The company shut down its plant in Boston for three months following a viral contamination issue with its products in June 2009. That slowed production and cut into revenue for its two key moneymakers. That debacle was followed five months later by a citation from federal inspectors that bits of debris were found in some of its injectable drugs.