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Sanofi Q1 operating profit falls 7%, keeps targets

French drugmaker Sanofi-Aventis posted Q1 net sales down 3.3% and operating profit down 7.2%, hit by generic rivals and a weak dollar, but maintained its outlook.

Net sales fell to €6.937 billion ($10.81 billion), down 3.3% on a reported basis and down 0.8% on a comparable basis.

Current operating income fell 7.2% to €2,522 billion. Excluding the effect of exchange rates, the decrease was about 1%, the company said.

Sales had been expected to fall around 4% to €6.877 billion and operating profit by 12% to €2.422 billion, hit in part by generic competition to sleeping pill Ambien, according to median analyst forecasts compiled by Reuters Estimates.

Adjusted net earnings excluding selected items came in at €1.883 billion, or €1.43 per share.

After minority interests, net profit fell 12% to €1.863 billion or €1.41 per share, against a forecast €1.834 billion.

Sanofi said it was maintaining its forecast of around 7% in adjusted earnings per share growth in 2008.

Competition in the United States took a toll on sales of sleeping pill Ambien, which fell 62%, and cancer drug Eloxatin suffered a 6% drop in sales due to competition in Europe. But blood-thinner Plavix saw sales rise 19%.

Excluding the impact of the introduction of generics of Ambien in the United States and Eloxatin in Europe, the top 15 products would have achieved growth of 12.2%, Sanofi said.

The strong euro and tumbling Ambien sales pushed US revenues down 2.8% on a comparable basis. In Europe sales fell 0.7% to €3.1 billion.

Net debt was stable at €4 billion.

“Barring major adverse events,” Sanofi expects 2008 full-year adjusted earnings per share excluding selected items to grow around 7%, calculated at a constant 2007 euro/dollar rate of $1.371, the company said.

Blood thinner Plavix is showing rapid growth compared to 2007, following the disappearance of a generic form of the drug in the United States.

Sanofi's US partner Bristol-Myers Squibb last week reported a 39% jump in its Q1 Plavix sales.

Thrombosis drug Lovenox, the group's top-seller, defied the currency drag with sales up 21.5%.

Analysts however say Lovenox could face generic competition within the next couple of years and Eli Lilly's new drug prasugrel is set to compete for business with Plavix.

Sanofi reported positive results from GEMS, the third Phase III trial evaluating eplivanserin in sleep quality. It plans to file for approval in the second half of 2008. (Reuters)