Last checked at 
* Sees FY earnings down 7-10 pct at constant currencies
* Says one office visited by authorities in China
* Says not aware of visit purpose
* Q2 business net income down 23.4 pct to 1.48 bln eur
* Shares down 6.2 percent (Adds details, CEO comments, background)
By Elena Berton
PARIS, Aug 1 (Reuters) - Sanofi SA cut its 2013earnings forecast as it reported a steeper-than-expected drop insecond-quarter profit, hit by the effect of patent losses,currency fluctuations and an inventory setback in Brazil.
The French company also said one of its 11 regional officesin China had been visited by the State Administration forIndustry and Commerce (SAIC) in Shenyang, but added it was notaware of the purpose of the visit from the agency.
A probe by Chinese authorities into the activities ofGlaxoSmithKline led to allegations of a wide-reachingbribery scandal last month and prompted speculation that otherinternational companies could be drawn into the investigation.
"We are not really aware of the purpose of the visit, we areworking with," Chief Executive Chris Viehbacher toldreporters on Thursday. SAIC is one of China's anti-trustregulators in charge of market supervision, which also looksinto low-level bribery cases.
Viehbacher added that the French group's local head officein Shanghai had not been contacted by Chinese authorities.
China's 21st Century Business Herald earlier reported Sanofiand U.S. drugmaker Eli Lilly & Co had confirmed visitsto their offices by the Shenyang bureau of the SAIC.
Sanofi said in an emailed statement to Reuters that theagency visited its offices on July 29, but said the purpose ofthe visit was unclear.
Eli Lilly said in a statement to the newspaper that thevisit was a routine inspection by the relevant governmentdepartments that occurred in early 2013, and was completelydifferent to previous industry investigations led by the publicsecurity bureau.
"Regarding this inspection, we have fully cooperated," theU.S. group told the paper. Lilly representatives in China didnot respond immediately to a request for comment from Reuters.
China remains a priority market for Western drug makers,which can command hefty price premiums for their medicines eventhough they are no longer protected by patents.
TOO EARLY
A promise this week by GlaxoSmithKline to make its drugsmore affordable in China in the wake of the bribery scandalcould be a lever for Chinese authorities to start redressing thebalance.
Viehbacher said it was premature to say what repercussionsthe scandal would have on Sanofi's business in China.
"We are examining the issue closely and we are examining ourbusiness in China, but I think it's too early to draw anyconclusions," he said.
Sanofi also predicted earnings this year would be between 7and 10 percent lower than in 2012 at constant exchange rates,but said it continued to expect to return to growth in thesecond half of 2013.
Sanofi had previously forecast that annual profit would beflat to 5 percent lower at constant currencies.
Its shares were down 6.2 percent at 75.13 euros by 0758 GMT,the biggest losers in the CAC 40 index in Paris whichwas up 0.3 percent.
"Whilst this is disappointing, the one-time nature of mostof the areas of weakness now creates even easier comparativesfor the growth rebound expected in the second half of 2013 andbeyond," analysts at brokerage Jefferies said in a note toclients.
The group's closely watched business net income, whichexcludes items such as amortisation and legal costs, declined 23.4 percent to 1.48 billion euros ($1.96 billion), below anaverage of 1.79 billion in a Thomson Reuters I/B/E/S poll ofnine analysts.
Sales shrunk 9.8 percent to 8 billion as last year's patentexpiry on anti-clotting drug Plavix, once the world'ssecond-best selling prescription drug, sliced 481 million eurosoff revenue in the quarter.
The group's generics business in Brazil was hit by muchhigher-than-planned inventory levels during the second quarter,Sanofi said.
As a result, Sanofi had to adjust sales by 122 million eurosand book an additional provision of 79 million to write off theinventory and other related costs. ($1 = 0.7531 euros) ($1 = 6.1289 Chinese yuan) (Additional reporting by Michael Martina in Beijing; Editing byChristian Plumb and David Holmes)
