By GREG KELLER AP Business Writer PARIS (AP) —Sanofi-Aventis SA reported Wednesday a 76 percent drop in fourth quarter net profits, due mainly to a charge for discontinuing two experimental cancer drugs, and announced it would shake up its R&D department. Europe’s third-largest pharmaceutical company — behind GlaxoSmithKline PLC and Novartis AG — said net profit fell to euro182 million ($235 million) in the fourth quarter from euro753 million a year earlier. Sanofi-Aventis took a euro1.43 billion non-cash charge to account for the two drugs’ discontinuation as well as settlement of a patent dispute with Barr Pharmaceuticals Inc. of New Jersey. The Paris-based company, known for its blockbuster blood thinner Plavix and anti-clotting treatment Lovenox, said that on an adjusted basis — that is, not accounting for such charges — its fourth quarter profit rose 13.9 percent to euro1.63 billion, or euro1.25 per share. The company forecast growth in adjusted earnings per share of at least 7 percent this year, down from 11.2 percent in 2008. New Chief Executive Chris Viehbacher, who took over in December, said in a statement that he aims to turn Sanofi-Aventis into “a diversified global leader in healthcare, with one of the most productive research and development in the sector.” To achieve this, Sanofi-Aventis said it will continue to “rationalize” its R&D pipeline to put more focus on “key technologies and diseases.” The company has created two new positions, Chief Medical Officer and Scientific Advisor, to work with current R&D head Marc Cluzel to boost research. Analysts have said the company’s R&D is lacking new drugs to replace those whose patents are expiring in coming years. Sanofi-Aventis also said it would “realign” its industrial capacity to cut costs, without specifying how. Competitors such as Eli Lilly & Co., AstraZeneca PLC, GlaxoSmithKline and Pfizer Inc. — the world’s largest pharmaceutical company — have been shedding thousands of jobs to cut costs. Sanofi-Aventis said it would also look for acquisitions, and named a Chief Strategic Officer to run this effort. “I think the message they’re giving to their market is positive in the sense that they’re going to try to change the situation,” said Gonzalo Moros, pharmaceutical analyst at Madrid-based Ahorro Corporacion Financiera. Moros welcomed the group’s plans to shakeup its R&D division. “They have to focus on more profitable research and development,” Moros said. Sanofi-Aventis’ shares fell 2.5 percent in the fourth quarter. In midday trading in Paris the stock was up 5.9 percent at euro46.58. In November the company abandoned research on diet drug Acomplia, which was once its most promising potential blockbuster treatment but which piled up problems with psychiatric side effects. The company said that for all of 2008, net profit fell 27 percent to euro3.85 billion, on sales that dropped 1.7 percent to euro27.6 billion.
