French pharmaceutical group Sanofi-Aventis issued a profit warning on Friday owing to competition in the US for its blockbuster blood-thinner Plavix from a generic drug.
But shares in the group rose as investors shrugged off the announcement from Sanofi, which slashed its forecast for growth in earnings per share this year from 12 percent to just two percent.
The profit warning came a day after a New York court granted the company and its US marketing partner Bristol-Myers Squibb a preliminary injunction halting sales of the generic version of Plavix, which is manufactured by Apotex. But the court did not order Apotex to recall already-shipped supplies of the product, or resell those supplies.
"Based on information circulating on the market, it is (therefore) possible that, prior to the imposition of the injunction, Apotex had already sold sufficient quantities in the United States to satisfy substantially all market demand through the end of 2006," Sanofi said in a statement.
Shares in Sanofi were up 1.0 percent to 70.75 euros in midday trade on the Paris CAC 40 exchange. "The cut to guidance (for earnings per share) shouldn't come as a huge surprise," US investment bank Merrill Lynch said in a statement.
"The injunction ruling was more thorough than we were expecting, and I think the market will conclude that it reads positively" as regards implications for the future, it said.
A dealer at a major French broker said sentiment on Sanofi stock had in fact been given a sharp boost as the market had more or less written off 2007 sales for Plavix. Plavix is taken by about 41 million people world-wide and is one of the most lucrative products in the Sanofi-Aventis portfolio.
It generated sales of 2.026 billion euros last year (2.594 billion dollars) and was Sanofi's second best-selling product after the anti-coagulant drug Lovenox. Its patent expires in 2011.
Sanofi said Thursday that a US trial associated with a challenge to the Lovenox patent, brought against Amphastar of the United States and the Israeli company Teva, had been postponed from October to December 4.
The generic drugmakers want to sell cheaper versions of Lovenox, which is Sanofi's best-selling drug, in the United States before the patent expires in 2011. The struggle against generic versions of patented drugs has become common for the biggest pharmaceutical companies, particularly in the United States.
It is easier for a generics company to launch a copycat product there because companies are obliged to prove their patents are still valid.
Sanofi also said Thursday that the US Food and Drug Administration (FDA) had refused approval for its Dronedarone drug, aimed at treating heart ryhtum disorders.
Dronedarone is a major drug within Sanofi's development pipeline. The company did not say why the FDA had rejected the drug but said a new filing would be made in 2008.