Weak Q2, pipeline woes sink Sanofi as Astra shines

By Ben Hirschler

LONDON (Reuters) - Weak second-quarter results and a series of pipeline setbacks derailed shares in French drugs group Sanofi-Aventis (SASY.PA) on Thursday, while Anglo-Swedish rival AstraZeneca (AZN.L) shone with a bright 2008 outlook.

Sales and profit both came in below expectations at Sanofi, which also dropped four experimental products from development. A fifth drug for depression faces an uncertain future.

The latest disappointments in the laboratory follow the loss of two cancer drugs earlier this month, undermining confidence in Sanofi's ability to replace sales of older drugs now facing competition from generics and newer rivals.

Those reverses more than offset a modest increase in the company's previously conservative earnings guidance for 2008 that still left its internal financial projections well short of analyst forecasts.

"Sanofi shows the problems that branded pharma majors have when the top-line (sales) comes under pressure and the pipeline fails," said Charles Stanley analyst Jeremy Batstone-Carr.

AstraZeneca, by contrast, hiked its earnings guidance more than expected, after beating expectations for sales and profits in the three months to June.

Shares in Sanofi fell 4.2 percent to 45.33 euros by 1215 GMT, while AstraZeneca jumped 3.6 percent to 24.77 pounds.

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