Ten weeks into the job, Sanofi-Aventis chief executive Chris Viehbacher has laid out his plans to push the firm forward and expressed his confidence in growing the French drugmaker into a diverse and strong global healthcare leader.
Speaking at a press conference in Paris, Mr Viehbacher noted that the company does indeed face challenges, similar to those faced by its peers, in terms of dealing with the patent cliff. Over 20% of its consolidated sales in 2008, excluding Lovenox (enoxaparin), could be exposed to generic competition up to 2013 and Sanofi is suffering from declining R&D productivity.
However there is also an awful lot that is right with Sanofi, he noted, saying that observers have tended to focus on the blockbuster bloodclotting agent Plavix (clopidogrel) and the failed anti-obesity drug Acomplia (rimonabant) and little else when looking at the firm. Mr Viehbacher pointed out that while other companies are talking about becoming major players in the emerging markets, Sanofi is “an established leader” in that sphere.
He went on to state that while “some say we have missed the train on biologicals”, this misses the point that 30% of sales come from biology-based compounds and the pipeline is stocked with many more. Mr Viehbacher also noted that many observers seem to have forgotten that Sanofi also has a significant presence the fields of over-the-counter treatments and animal health, while its generics operations have the potential to grow. He did say, however, that growth in the latter is unlikely to take place in the USA, where he feels Sanofi is not in a position to take on the might of firms like Teva.
The future of the firm lies in “diversified platform growth”, Mr Viehbacher said, noting that “the blockbuster is not dead but you can’t bet the ranch” on them. Innovation in R&D is still at the core of Sanofi, he added, but it needs to be more efficient.
R&D portfolio cut
An initial review of the R&D portfolio, and a reducing and replenishing of the pipeline, has seen the number of projects cut overall by 10% to leave 65 new molecular entities and vaccines in development, research chief Marc Clouzel told PharmaTimes World News. A yet more detailed review is taking place and Sanofi will reveal those details in the coming months.
Mr Viehbacher’s key message was that Sanofi needs to simplify and speed-up its decision-making processes ina numbr of areas. In R&D, he is seeking more external alliances to go along with in-house projects and said that “innovation is not dead, there are 6,000 biotechs out there, as well as numerous government and academic schemes. “We need to capture the best of that,” he added.
The CEO did not want to get bogged down in the numbers game regarding job losses and cost-cutting, noting that Sanofi will not “talk about an nth restructuring programme,” unlike some of its peers. Instead, he said that the company has been “very quietly and very efficiently” reducing expenses over the years, observing that a few years ago Sanofi had 79 manufacturing sites and that is now down to 64.
Mr Viehbacher stated that the company is “among the best-in-class” when it comes to cost control, sales forces have been realigned and cashflow-wise, it ended 2008 with 3.7 billion euros, before share repurchases. Net debt stood at 1.8 billion euros and this will likely be wiped clean by the end of the year.
The money is there, then, for acquisitions, and Mr Viehbacher said that Sanofi is in the market for small- to mid-sized bolt-ons, ie up to 15 billion euros. He did not completely rule out a big deal but noted that during his time at GlaxoSmithKline and its earlier incarnations, “I have been through two mega-mergers which hurt our creativity and innovation”.
He concluded by stressing that Sanofi’s offerings “must be driven by patient needs and create value for payors”. This can only be achieved by bringing “decision-making closer to the customer” and this will be helped by two new appointments. Laurence Debroux has been selected as chief strategic officer, while Elias Zerhouni will fill the posts of chief medical officer and scientific advisor to the CEO.
Mr Viehbacher also addressed the often-cited claim that Sanofi ihas been “too French”, telling PharmaTimes World News that this is a misconception that emanates from the Anglo-Saxon world. He added that “this is the first company that went into China and is a company that knows how to adapt”.
Investors and analysts seem to like the cut of Mr Viehbacher’s jib and Sanofi shares rose by almost 6%. By Kevin Grogan in Paris
