Sanofi-aventis reported this morning Q4 2006 net income fell 5% to €1.02/share (€1.38b) from €1.08 (€1.44b) in Q4 2005. Revenues were up 5% to €1.38b. The company gave 2007 guidance of 6% EPS gains, similar to its 2006 results. Sanofi's profit from anti-clotting drug Plavix shrank after generic copies entered U.S. markets during a patent dispute which is currently in court; Plavix is the world's #2 selling drug. CEO Gerard le Fur plans to submit 12 new drug applications over the next two years, and another six for vaccinations. Also yesterday the company suffered two serious setbacks in the U.S.: (1) The FDA again pushed off ruling on its obesity drug, Acomplia, from late April to July 27; the April deadline was already delayed 90 days from its original February target. Analysts say Acomplia is sanofi's most promising drug in an otherwise weak pipeline. It is already sold in Europe. (2) The FDA said its antibiotic Ketek, approved in 2004, can no longer be marketed for two common ailments (sinusitis and bronchitis), and that it must carry a strong safety warning on its label about risks of liver damage and failure -- moves likely to sharply limit its use. Newspapers reported last month that sanofi may bid for Bristol-Myers to gain new products and revive growth, but later said the two couldn't come to an agreement. Shares were down 1.6% (€1.05) to €66.75 this morning in Paris.
Sources: Earnings Press Release, FDA Ketek Statement, Wall Street Journal, Bloomberg, MarketWatch
Commentary: Sanofi Loses Lovenox Patent • Will Sanofi-Aventis Merge With Bristol-Myers Squibb? • Acomplia May Have Use in Diabetes Treatment
Stocks/ETFs to watch: sanofi-aventis (SNY). Competitors: Bristol-Myers Squibb Co. (BMY), Teva Pharmaceutical Industries (TEVA), Eli Lilly and Company (LLY), Merck & Co. Inc. (MRK), Pfizer Inc. (PFE). ETFs: Pharmaceutical HOLDRs (PPH), iShares Dow Jones US Pharmaceuticals (IHE)
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