Shrugging Off the Side Effects

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Sometimes it's hard to predict how patients and doctors will react to medical news.

Sales of Merck's (NYSE: MRK) and Schering-Plough's Vytorin plummeted after a study showed that Vytorin plus a statin lowered cholesterol, but didn't work any better than the statin alone at lowering the amount of plaque in arteries.

sanofi-aventis' (NYSE: SNY) long-lasting insulin Lantus is linked to cancer, and what happens to sales? They jump almost 22% year over year in the third quarter. Sorry, Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO) -- no free lunch for you.

In addition to managing the Lantus news quite well, Sanofi managed a pretty solid quarter in general. Sales were up 8%, helped slightly by a currency boost, but mostly because of strong showings from Lantus, Lovenox, and Plavix, which it sells with Bristol-Myers Squibb (NYSE: BMY).

Of those three, the one to worry about is Lovenox. The drug lost patent protection in the U.S. a while ago, after Teva Pharmaceutical (Nasdaq: TEVA) and Amphastar Pharmaceuticals challenged the patent. But the drug remains competition-free for now, because the Food and Drug Administration hasn't approved the application to sell generic versions of the complex drug filed by Teva and Amphastar, nor the one from Novartis (NYSE: NVS) and Momenta Pharmaceuticals. Unfortunately for all the companies involved and their shareholders, there's no way to know when those approvals will be handed down.

Assuming the FDA delay lasts through the fourth quarter, we should see another solid performance from Sanofi, thanks to revenue from the swine flu vaccine rolling in. The company is giving guidance for an 11% increase in adjusted earnings at constant currencies.

Longer-term, though, predicting Sanofi's future is about as hard as predicting patients' reactions to medical news.