UPDATE 2-Sanofi keeps forecast after Q1 beats consensus

* Q1 business net up at 2.427 bln euros, EPS at 1.86 euros

* Business net, EPS beat consensus, sales below forecasts

* Reiterates 2010 business EPS growth forecast of 2-5 pct

* Expects Eloxatin sales recovery in early Q1 2011

* Share up 1.23 percent

(Adds CEO comment from conference call, analysts, detail)

By Caroline Jacobs

PARIS, April 29 (BestGrowthStock) – French drugmaker Sanofi-Aventis
(SASY.PA: ) kept its financial forecast for the year after its
first-quarter earnings beat consensus thanks in part to bumper
swine flu vaccine sales and cost savings.

The first quarter could turn out to be the year’s most solid
as the effect of swine flu or H1N1 sales will fade and generic
competition on key drugs like bloodthinner Plavix and cancer
drugs Eloxatin and Taxotere will increasingly weigh.

Shares in teh company opened 1.23 percent higher.

Sanofi still expects 2010 business earnings per share to
grow 2-5 percent at constant exchange rates and excluding the
possible launch of a generic to its bloodthinner Lovenox.

That compares with double-digit EPS growth in 2009.

“Our growth platforms delivered double-digit growth enhanced
by recent targeted acquisitions and A/H1N1 vaccine sales,” Chief
Executive Chris Viehbacher said calling the first quarter a
“good start to the year”.

Business EPS grew a better-than-expected 9.4 percent to 1.86
euros in the first quarter against a Reuters consensus, based on
17 analysts, of 1.77 euros. Business net income rose 9.7 percent
to 2.427 billion euros against consensus for 2.287 billion.

Sales rose 3.9 percent to 7.385 billion, against the poll’s
7.427 billion, as diabetes drug Lantus and vaccines helped make
up for the detrimental effects of Plavix generics in Europe and
a copy of injectable cancer drug Eloxatin in the United States.

Eloxatin sales should recover in early 2011, Sanofi expects,
following a settlement it reached with generic drugmakers to
temporarily stop selling their copy as of the end of June. Sales
of the ex blockbuster fell to 66 million euros in the quarter.

IN LINE WITH NOVARTIS AND GLAXOSMITHKLINE

Analysts welcomed Sanofi’s better-than-expected earnings
which echoed Novartis (NOVN.VX: ) and GlaxoSmithKline’s (GSK.L: )
quarterly performance. [ID:nLDE63F1HU] [ID:nLDE63P20E]

“Our take: solid numbers and fully supportive
of the full-year outlook but no fireworks here,” Deutsche Bank
analyst Mark Clark wrote in a research note.

“There are a lot of patent expiries for Sanofi going forward
but it has built up a lot of good will with Viehbacher on
board,” Nomura analyst Amit Roy said, rating Sanofi shares
“hold” with a 47 euro target price.

Revenues from H1N1 vaccines reached 413 million euros,
taking total vaccine sales from the Sanofi Pasteur division to
944 million euros, below forecasts for over a billion euros.

Sanofi has been steering away from mainly focusing on
developing drugs that can sell several billion euros a year but
also makes them vulnerable to patent challenges, to expand in
areas like consumer health, generics and emerging markets.

Viehbacher said that Sanofi was “still shopping around”,
confirming Sanofi aimed to a similar amount of small to
mid-sized deals and partnerships as it did last year.

So far opportunities for big pharmaceutical companies to do
biotechnology deals were still favourable, Viehbacher said,
given that money raising possibilities for biotechs through
initial public offerings or venture capital remained sparse.

Blockbuster cancer drug Taxotere will lose its patent
protection in November in Europe and the United States, allowing
generic drugmakers to sell cheaper copies.

Following last year’s thorough pipeline review and ditching
two more mid-stage Phase II products in the first quarter Sanofi
has 48 products in development, including potential blockbuster
BSI-201 which seeks to treat triple negative breast cancer.

Sanofi expected to file BSI-201 in the first quarter of
2011. The candidate drug obtained a quicker U.S. review status
last year as promising trial results showed it could treat a
life-threatening disease and address unmet medical needs.

Viehbacher said the Greek debt crisis was worrisome for
Europe’s economic recovery from the earlier global recession.

“I’m quite pessimistic about the economic outlook,” he said,
adding he was glad of Sanofi’s growing presence in booming
emerging markets where sales grew nearly 41 percent to 2.3
billion euros.

Sanofi’s business EPS or net income excludes several items,
such as restructuring or litigation costs.

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(Reporting by Caroline Jacobs, Editing by David Cowell and
Marcel Michelson)

UPDATE 2-Sanofi keeps forecast after Q1 beats consensus