Sanofi, the World's third largest pharma company with pharmaceutical sales of $43 billion in 2012, has suffered heavy setback during the second quarter ended June 2013 on account of negative impact from Brazil generics and losses of exclusivity for Plavix and Avapro in the US. Its net income attributable to equity holders declined sharply by 61.5 per cent to €444 million from €1,153 million in the corresponding quarter of last year. Its net sales also declined by 9.8 per cent to €8,003 million from $8,870 million. The earnings per share moved down to €0.33 from €0.88 in the last period.

Christopher A Vlehbacher, CEO, said, “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 under performance in certain business areas. However, sales growth of 7.7 per cent 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.”

The sales of he pharmaceutical business declined by 7.1 per cent to €6,714 million due to generic competition, EU austerity measures and an adjustment of €122 million related to Brazil. The company's sales in emerging markets declined by 2.3 per cent to €2,669 million, despite double-digit sales growth achieved for diabetes, vaccines, genzyme and animal health. Diabetes delivered growth of 16.2 per cent to €1,621 million as Lantus sales reached €1,409 million, an increase of 17.7 per cent . Vaccines sales improved marginally by 0.4 per cent to €760 million.

For the first half ended June 2013, Sanofi's net sales declined by 7.6 per cent to €16,062 million from €17,381 million in the similar period of last year. Its net profit declined sharply by 51.1 per cent to €1,448 million from €2,962 million. The earnings per share worked out to €1.09 for the first half of 2013 as against €2.25 in the last period. The pharmaceutical sales declined by 5.7 per cent to €13,522 million and that of vaccines increased by 7.2 per cent to €1,457 million. The sales in US declined by 9.9 per cent to €4,797 million during the first half ended June 2013 and that in Western Europe declined by 9 per cent to €3,958 million. The sales in emerging markets increased by 1.9 per cent to €5,388 million.

The impact of Brazil and the first half performance, the company expected 2013 EPS to be 7 per cent to 10 lower than 2012.