* Q1 business EPS falls to 1.66 eur, sales fall to 7.779 bln
* Q1 earnings just above Reuters poll average
* Generics, H1N1 impact partly offset by growth platforms
* Genzyme integration to contribute 3-4 percent to 2011 EPS
(Adds further CEO comment, updates with closing shares)
By Caroline Jacobs
PARIS, April 28 (Reuters) - Growing generic competition knocked first quarter earnings at Sanofi-Aventis, underscoring the French drugmaker's need to swiftly integrate U.S. biotech Genzyme to help counter the threat.
Like AstraZeneca, Sanofi's earnings on Thursday showed a hit by generics to several of its top drugs, as well as a drop in sales from swine flu vaccines.
Sanofi expects its takeover of Genzyme, completed earlier this month, to lessen its exposure to cheaper copycat drugs as it adds treatment of rare diseases as a new growth area.
Chief Executive Chris Viehbacher said the integration of its $20.1 billion purchase was going well and he was "hopeful we can maintain the people that made Genzyme so strong".
Decisions on Genzyme's integration, such as scrutiny of its drug pipeline, would be announced before the summer, said Viehbacher who spends one or two days a week at Genzyme's headquarters in Cambridge, Massachusetts.
Genzyme has 10 drugs in clinical trials, three of which are in promising late stage trials. Genzyme's drugs would add to Sanofi's pipeline of 64 products, including vaccines.
Due to the integration of Genzyme, which has about 10,000 staff compared with 100,000 at Sanofi, Sanofi refrained from giving an earnings outlook, saying it would update its forecast at its first-half earnings in July.
Throughout the year, however, Genzyme should add to Sanofi's performance and finance director Jerome Contamine estimated it to contribute 3 to 4 percent to Sanofi's business earnings per share, which excludes items like amortisation and legal costs.
Manufacturing issues involving two of Genzyme's main drugs Cerezyme and Fabrazyme were improving daily, Viehbacher said, as Genzyme solved shortages caused by a plant contamination.
"I have a lot of confidence that we will be able to get manufacturing issues back on track pretty quick," he said.
Deutsche Bank analysts called those comments "reassuring" in a research note and rated Sanofi shares "buy".
NEW GROWTH AREAS
Sanofi shares closed little changed at 53.30 euros after hitting a year high on Tuesday.
Earnings just beat the average of a Reuters analyst poll and showed that Sanofi's new growth areas, which represented 60 percent of its business in the quarter, could partly offset the dent from generics and the absence of H1N1 flu vaccine sales.
Business EPS, fell 10.8 percent to 1.66 euros in the first quarter against the Reuters poll's average of 1.63 euros.
Sales lost 1.5 percent to 7.779 billion euros ($11.4 billion) compared with consensus for 7.659 billion, as a stronger-than-expected currency effect helped cushion the fall, on business net income down 10.6 percent at 2.170 billion euros.
Analysts are keenly awaiting Sanofi's seminar in September, when the group will clarify its outlook for 2013 and beyond.
"We can (then) start to evaluate the impact of the deals they have done. It will be interesting to see what Viehbacher's revised vision is," said Michael Leacock, analyst at Royal Bank of Scotland.
Viehbacher set out to change Sanofi when he became CEO end 2008 and steer it through the so-called patent-cliff years.
Under his tenure Sanofi has struck plenty of partnerships to replenish its pipeline with biotechnology-based drugs that are much harder to copy, while Genzyme has been only one of many, albeit much smaller, acquisitions.
Generics weighed on Sanofi's high-margin branded drugs such as anti blood clotter Lovenox and cancer drug Taxotere. And as with vaccine makers GlaxoSmithKline and Novartis, H1N1 flu vaccines no longer featured, pulling Sanofi's total vaccine sales down 38.3 percent.
Sanofi's so-called growth platforms, meant to diversify the group's business and limit its exposure to generics, increased sales at constant exchange rates by 4.3 percent with consumer health products up 40 percent and animal health up 11.5 percent.
Sanofi for the first time consolidated its Merial animal health unit after its joint venture with Merck failed.
Viehbacher said Merial's expansion would mainly be in livestock and in emerging markets where growing middle classes are buying pets. In addition, he saw possibilities for synergies between animal health and Sanofi's pharmaceutical business, with some diseases such as cancer and diabetes overlapping.
As part of its business review, Sanofi wants to sell its small dermatology line and Viehbacher said interest was strong.
Separately, Genzyme's first-quarter sales rose 7 percent to $1.009 billion, not consolidated in Sanofi's accounts. ($1=.6817 Euro) (Reporting by Caroline Jacobs, Editing by Alexander Smith and Elaine Hardcastle)