Sanofi had a “difficult” second quarter, says CEO

Sanofi's sales slumped in the second quarter of 2013 to €8,003 million – a decrease of nearly 10% on a reported basis. The French pharma company determined that the reasons behind this loss were increased generic competition and an inventory setback in Brazil.

Sales in the emerging markets decreased by 2.3%, however double-digit sales growth was achieved in the following areas: diabetes, vaccines, Genzyme and Animal Health. Diabetes delivered growth of 16.2% to €1,621 million as Lantus (insulin glargine) sales reached €1,409 million, which is an increase of 17.7%. Vaccines sales reached €760 million and compared to strong Q2 2012 sales, which benefited from a later timing of flu vaccines supply in the Southern Hemisphere.

Genzyme also recorded another strong quarter with sales growth of 25.6% to €525 million. This increase reflects strong performance of the rare disease franchise and the progression of multiple sclerosis treatment, Aubagio (teriflunomide).

"The second quarter was a difficult quarter. As expected, this was the last quarter with a tough comparison to the prior year due to the residual impact of the patent cliff. Sales were also affected by our business in Brazil and commercial underperformance in certain business areas. However, sales growth of 7.7% of our growth platforms in the first half of 2013 continues to demonstrate the value of Sanofi's integrated business model. In addition, we keep on making strong progress in delivering a growing portfolio of high potential R&D assets, as highlighted by the multiple clinical and regulatory milestones reached in the second quarter of 2013. We continue to expect to return to growth in the second half of 2013."

Sanofi Chief Executive Officer, Christopher A. Viehbacher.

Given the impact of Brazil and the year-to-date performance, Sanofi has adjusted its 2013 financial guidance. Its 2013 business EPS is expected to be 7-10% lower than 2012 at CER, barring major unforeseen adverse events.