Patent losses hit AstraZeneca harder than rivals

Thu Oct 25, 2012 11:22am EDT
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By Ben Hirschler

LONDON (Reuters) - Three of Europe's top drugmakers reported falls in third-quarter earnings on Thursday, hurt by patent losses, but the common story hides different trajectories at the rival groups.

While AstraZeneca faces years of continuing sales declines, due to a lack of new drugs to replace those losing protection, Sanofi and Novartis are turning the corner.

Revenues at the British group are expected to tumble 25 percent between 2011 and 2016, while Sanofi of France will grow 21 percent and Swiss-based Novartis 9 percent over the same period, according to Thomson Reuters consensus forecasts.

"In Europe, AstraZeneca will be the only company with declining sales in the coming years," said Britta Holt of Fitch Ratings.

"Novartis is in an excellent position, with a full pipeline and strong diversification, and Sanofi is also on the right track."

All three companies are going through a widely anticipated "cliff" of patent expiries that has opened the door to cheaper generics, and the quarter to end-September was one of the heaviest for such losses.

That problem is being compounded by austerity measures in major Western markets, notably the European Union, which is forcing companies to think up creative new ways to sell their products.

AstraZeneca's sales slumped by a bigger-than-expected 19 percent to $6.68 billion in the third quarter, hit particularly by loss of exclusivity on antipsychotic Seroquel, as "core" earnings per share, which exclude some items, slid 12 percent.   Continued...

A worker leaves the AstraZeneca research facility in Loughborough, March 2, 2010. REUTERS/Darren Staples