Sanofi-Aventis posted higher-than-expected fourth-quarter profits on Tuesday and predicted more growth for 2007, but declined to comment on rumours of a takeover of Bristol-Myers Squibb.
Sanofi said it had made a current operating profit of 2.272 billion euros ($2.95 billion) in the final quarter of 2006, and a net profit excluding exceptional items of 1.377 billion, beating average forecasts from 15 analysts polled by Reuters.
But the results were offset by a further three-month delay in the U.S. regulatory review of key new anti-obesity drug Acomplia, to July 27. Company officials declined to comment further on Monday's decision by the Food and DrugAdministration.
Chief Financial Officer Jean-Claude Leroy cautioned that generic competition would make 2007 a difficult year. "We still expect a certain level of generification in 2007 ... The year will be difficult because of these phenomena," he told reporters.
Sanofi's pipeline of experimental drugs included 46 products in Phase IIb and final-stage Phase III clinical trials and the company intends to submit 12 new products for approval in 2007-2008. Two cancer projects, however, were discontinued.
New drugs in store are key for Sanofi's future earnings growth, which has been clouded by healthcare savings and patent expiries or generic attacks on blockbusters such as allergy pill Allegra and bloodthinners Plavix and Lovenox.
New research head Marc Cluzel told reporters the company planned to hold an R&D day for investors in September to explaint he potential of a drug pipeline which he said was not wellunderstood.
Silent on M&A
Sanofi declined to comment on recent speculation that it and U.S. giant Bristol-Myers Squibb had been in talks for the French firmto buy the smaller U.S. group or whether those discussions hadnow ceased.
Buying Bristol-Myers could make strategic sense, according to industry analysts, but it would be a financial stretch and could dilute earnings in the near term.
Sanofi trades on 13 times forecast 2007 earnings, a discount of around 20% to the European sector, according to Reuters data.
Sanofi has been dealt several blows in the past year, notably by the surprise U.S. launch of a generic to its Plavix bloodthinner, as well as the fact it is still awaiting U.S. marketing approval for Acomplia, which it had hoped to launch a year ago in the world's top drugs market.
It also suffered a setback when U.S. regulators rejected its heart drug Multaq and only last week it lost the patent on Lovenox in a U.S. court ruling, although analysts believe generic drugmakers still face hurdles in launching a copycatform of the complex medicine.