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Sanofi saw its earnings slump in the third quarter as generic competitors ate into profits of its Eloxatin cancer treatment.
The French drug maker reported Thursday net profit of €1.6 billion ($2.1 billion) for the July-September quarter, down 20 percent from €2 billion a year earlier.
Sanofi said it lost €448 million in sales from generic competition in the quarter. It blamed Eloxatin's loss of protection in the U.S. for most of the decline.
The company now expects its core earnings, what it calls "Business EPS," to fall 12 percent this year compared to 2011, at constant exchange rates. In the third quarter, Business EPS slumped 14.5 percent.
The decline expected for this year is not as bad as previously thought and shares in the company got a lift, trading 1.8 percent higher at €67.30 by midmorning.
Overall sales rose 3.3 percent to €9 billion in the quarter, thanks in part to growth of Sanofi's Lantus diabetes treatment in the U.S.
Generic competition for Sanofi's Plavix blood thinner and Avapro blood pressure drugs are expected to cost it €1.4 billion in 2012. In the third quarter alone this cost it €469 million.
As the expiration of lucrative patents wipes out billions in annual revenue, Sanofi is shifting its focus from blockbuster patented drugs to six growth "platforms" - areas with products with indefinite lifespans, not the typical 10 years before prescription pills get generic competition.
Those areas are vaccines, consumer health products, medicines for pets and livestock, diabetes treatments and testing supplies, biologic drugs for rare or complex disorders, and products for emerging markets - China, India, Brazil and other countries where a growing middle class is buying more medicine.
Many of those divisions posted strong gains in the third quarter. Consumer health care sales rose 5.9 percent while animal health sales rose 3.8 percent.
Earlier this month Bristol-Myers Squibb Co. and Sanofi said they would restructure their longtime partnership selling popular heart medications, now that their sales are plunging due to widespread competition from generic versions.
The new agreement returns to Sanofi rights to sell the drugs in nearly all countries. Bristol-Myers would continue to sell Plavix in the U.S. through December 2019. It would receive royalties from Sanofi's sales of Avapro and Avalide worldwide and from sales of Plavix in all countries except the U.S. and Japan, through 2018.
The agreement is scheduled to take effect on Jan. 1, 2013. At the end of 2018, Bristol is to get a payment of $200 million from Sanofi.
The two drugmakers made tens of billions of dollars in sales over the last decade or so selling Plavix, a blood thinner that was the world's second-best-selling drug for a long time. The companies also shared revenue from blood pressure drug Avapro and a related drug called Avalide that also includes a diuretic, or water pill.
The three medicines, among the top sellers for both companies, all got generic competition in the U.S. this spring. They already had generic rivals in other countries.