Sanofi's Viehbacher - “we will never get out of research”

Sanofi-Aventis believes that its transformation into a global healthcare powerhouse is progressing well, while shifting its research priorities on the pharma side from internal work to external alliances is making it a more effective drugmaker.

Speaking at the company’s annual results conference in Paris, chief executive Chris Viehbacher said that the firm is getting off “the treadmill of patent expiries” by concentrating on its key growth drivers, namely emerging markets, diabetes, vaccines, consumer healthcare and new products, notably the anti-arrhythmic Multaq (dronedarone). These areas will provide sustainable growth, which “are not sideline or boutique businesses”, through to 2013, he added.

Mr Viehbacher acknowledged that patent expiries will start to hurt, noting that the bloodthinner Plavix (clopidogrel), partnered with Bristol-Myers Squibb, suffered an 11.6% decline in fourth-quarter revenues to 570 million euros. This was due to generic competition in Europe, though for the moment the franchise is being defended by sales of the drug in Japan and elsewhere.

Patent expiries meant that the colorectal cancer drug Eloxatin (oxaliplatin) sank 80.5% to 67 million euros, and while turnover of Lovenox (enoxaparin) was up 8.1% to 754 million euros, generic versions to the antithrombotic are on the horizon. Mr Viehbacher said he does not know when or whether a substitute will be approved by the US Food and Drug Administration –“the FDA talks to the generics (companies), not us” – but insisted that even losing the blockbuster will not have an impact on long-term growth.

This is because Sanofi has invested heavily in bolt-on acquisitions in the aforementioned areas, spending 6.6 billion euros in 2009 on 33 new partnerships and acquisitions. They seem to be bearing fruit already as consumer healthcare sales rose 36.1% to 405 million euros, generics shot up 253% to 333 million euros and and the emerging markets posted revenue growth of 26.2% to almost 2.00 billion.

In terms of R&D, Mr Viehbacher told PharmaTimes World news that “we cleaned out the portfolio and improved governance”. When asked whether Sanofi would consider pulling out of discovery research in certain areas, he insisted that “innovation is still at the core of what we do” and “you need to be present in discovery”. However, partnerships rather than internal work is the key to success, citing the French drugmaker’s alliances with the Salk Institute for Biological Sciences and the California Institute of Technology (Caltech).

Mr Viehbacher said that these pacts are true partnerships, “we are not just a funding mechanism or a glorified venture capitalist” and “we are becoming the partner of choice”. He insisted that “we will never get out of research”.

Given the scale of restructuring at rival companies, the CEO told PharmaTimes World news that changes have taken place across Sanofi to adjust to the “transformation” programme and jobs have gone. However, he noted that “you can’t build a business on cost-reduction” and the firm “will not be getting into a race” with its rivals in this area.

Equally, Mr Viehbacher noted that Sanofi will not be taking a ride on the mega-merger merry-go-round any time soon, but 2010 will see the same amount of deals as last year to bolster the company’s core businesses.

There will be more from the Sanofi conference in tomorrow’s e-lert.

By Kevin Grogan in Paris
PharmaTimes