Sanofi shares gained more than 4 percent in morning trade on Tuesday before easing to 69.85 euros, up 2.9 percent. The French company still expects earnings per share growth of at least 20 percent in 2005 although allergy drug Allegra, its third-best selling treatment last year, faces lower sales following a surprise surge of generic rivals in September.
Net profit reached 1.92 billion euros ($2.27 billion) compared with 1.49 billion in the year-ago quarter, adjusted for Sanofi's take-over of Aventis last year, beating the highest forecast in a Reuters poll whose average stood at 1.67 billion.
Operating profit before exceptional items climbed a higher-than-forecast 20.2 percent to 2.653 billion euros on sales exceeding expectations with an 11.6 percent rise to 7.2 billion euros. The poll's average forecasts showed operating profit before exceptionals at 2.39 billion euros on sales of 6.95 billion.
"For the earnings, it looks as if the surprisingly strong sales have literally dropped through to the bottom line," said Craig Maxwell, analyst at J.P. Morgan.
Sales of Sanofi's blockbuster drugs, like cancer treatments Taxotere and Eloxtine and anti-thrombosis drugs Plavix and Lovenox, all came in above the average forecasts in the Reuters poll. Sales of Allegra and sleeping pill Ambien were less affected by competition than some analysts had feared.
Allegra sales slipped to 367 million euros - still beating forecasts however, as analysts had expected generic rivalry from Barr Pharmaceuticals and Teva Pharmaceuticals Industries in the US to have pushed sales down to 330 million euros.
Both teamed up to launch the pill ahead of the outcome of a US court case concerning challenges on a patent protecting Allegra. Fighting off copy-cat rivalry, Sanofi launched its own Allegra generic in the US with Prasco Laboratories. Sales of Ambien, the world's most popular prescription sleep drug, weathered mounting competition, rising to 419 million euros from 397 million instead of dropping to 376 million as forecast in the Reuters poll.