Sanofi-Aventis says its efforts to refocus the business are progressing well and is pleased with the solid set of financials it has posted.
Chief executive Chris Viehbacher, speaking at the French drugmaker’s annual results conference in Paris, said the firm’s performance in 2010 was impressive, given that 2 billion euros in sales were lost to generic competition, with 200 million euros and 250 million euros being lost due to the effects of US healthcare reforms and cost-cutting in Europe, respectively. He believes that absorbing this hits has been possible because there are now “two Sanofis”, namely the pharma side and the consumer health/animal health/generics businesses.
Mr Viehbacher said that “the drivers of growth are drying up, we can’t do anything about that”, referring to patent expiries on the likes of Lovenox (enoxaparin), fourth-quarter sales of which were down 26.9% to 582 million euros, Taxotere (docetaxel; -20.1% to 45 million euros) and Plavix (clopidogrel; -18.6% to 505 million euros). Given this scenario, “we had to create businesses that have natural barriers to entry”, he said, hence the push into consumer healthcare.
This need to reinvigorate the business has seen Sanofi push on with its expansion into emerging markets, which made up 29.9% of sales in 2010. Mr Viehbacher noted that there is “no company better positioned to succeed in the emerging markets”.
Pharma is obviously still a huge part of the business, especially the diabetes franchise which contributed some 1.10 billion euros to fourth-quarter sales, up 8.8%. Lantus (insulin glargine) made up 894 million euros of that, also a rise of 8.8%. Mr Viehbacher noted that Lantus is the number one diabetes brand worldwide and as deaths from the disease are likely to grow more than 50% in the next ten years, growth will be considerable, especially in a disease area dominated by two companies, ie Sanofi and Novartis.
The French drugmaker’s chief also noted that the company’s cost-cutting target of 2 billion euros by 2013 is well ahead of schedule. Savings of 1.3 billion euros was achieved in 2010 and the target will be reached by the end of this year. When asked whether more cuts were coming, Mr Viehbacher said that “you can’t subject your company to serial cost-cutting”, and the restructuring at Sanofi has been about making the company work better rather than an expense issue”.
As for the much-touted proposed acquisition of Genzyme Corp, Mr Viehbacher said due diligence is taking place and “this has to be done carefully. Expectations around timing have been unrealistic”. Also, a senior Sanofi executive told PharmaTimes World News that media reports Sanofi will up its bid for Genzyme to $74 per share from the previously-rejected $69 per share are pure speculation and there is a possibility the company will extend its original offer again.
Mr Viehbacher insisted there is no rush to complete the deal, adding that the company will keep looking at other bolt-on acquisitions.
