Sanofi won’t follow trend for spin-offs
pharmafile | February 8, 2013 | News story | Sales and Marketing | Abbott, Pfizer, Sanofi, Viehbacher
Sanofi’s chief executive Chris Viehbacher says the firm plans to maintain its portfolio of business divisions for the foreseeable future, as it seeks to build growth over the next few years.
The company is now shaking off the effects of the demise of blockbusters Plavix and Eloxatin, and hopes to resume growth in the second half of 2013.
But Sanofi has forecast modest growth between 2012 and 2015, saying it expects a compound growth rate of 5% for the period.
The last few months have seen numerous pharma firms split up and spin-off business units – Abbvie and Abbott splitting in two, while Pfizer has sold off numerous divisions – all in order to generate greater returns for shareholders.
In early February, Pfizer floated a 20% share in its animal health division, now called Zoetis. The huge success of this public offering has raised the value of the business, and makes similar moves by Pfizer and its competitors increasingly likely.
However, Sanofi says it sees a lot of value in retaining its spread of business units – which encompasses branded medicines, generics, vaccines, consumer healthcare and an animal health division, called Merial.
Speaking to journalist at the company’s annual results press conference, Viehbacher questioned the description of Sanofi’s business as ‘diversified,’ saying its set up was a far cry from that of Johnson & Johnson, which was in effect a holding company for a set of entirely separate businesses. In contrast, he said Sanofi’s divisions produce real synergy as a whole.
One example of this is that in animal health, where Merial’s portfolio is focused around the pet market. Viehbacher says research into new treatments for diabetes and oncology in this sector immediately provides useful animal studies which help inform research for human medicines.
He added that Merial’s operating margins were a lot closer to those of pharma divisions compared to some other animal health firms.
Viehbacher also said having a range of divisions helped the firm expand its presence in emerging markets, and also allowed it to meet demand for ‘integrated care’ which is an increasingly popular concept.
Merial was created in 1997 through the merger of the animal health businesses of Merck and Rhone Merieux, a predecessor to Sanofi. The firm bought out Merck’s share of the business just three years ago, providing another reason for pursuing its multi-division strategy.
New pharma products
In its post-Plavix world, Sanofi is looking to seven ‘growth platforms’ to help sustain the business, and this includes consumer healthcare (which saw sales rise 9.9% last year) and Merial, which recorded sales growth of 3.1 per cent.
But despite healthy expansion in its non-pharma divisions, Sanofi is pinning its hopes on innovative new human medicines to help generate the lion’s share of growth in the years ahead. The firm has just received EU approval for its new diabetes treatment Lyxumia (lixisenatide), which analysts expect to earn in excess of $1 billion in peak sales. The drug is a new entrant in the GLP-1 analogue field, and will help Sanofi build on the market dominance of insulin analogue Lantus.
Other new product hopefuls are two MS treatments – oral treatment Aubagio, which gained US approval in September (and is performing well in its launch period) and injectable Lemtrada, which will be appraised by regulators later this year.
However, the firm will face stiff competition in the MS market, where another new oral drug currently awaiting approval – Biogen’s BG-12 – is tipped to be the most important new product.
One key date expected in the course of 2013 includes a Phase III trial of eliglustat, the drug which Sanofi hope will help biologics arm Genzyme regain its momentum.
The drug is a new drug for Gaucher’s disease, where Genzyme’s Cerezyme is the current standard treatment. Eliglustat is an oral drug, meaning it could help the firm stay ahead of new competitors in this rare disease field.
Andrew McConaghie
Related Content
Sanofi and Regeneron’s Dupixent receives CHMP recommendation for chronic spontaneous urticaria
Sanofi and Regeneron have received a positive opinion from the European Medicines Agency’s (EMA) Committee …
Sanofi’s treatment granted orphan designation for rare chronic inflammatory condition
The European Medicines Agency has granted orphan designation to Sanofi’s investigational Bruton’s tyrosine kinase (BTK) …
Sanofi completes acquisition of Vigil Neuroscience to early neurology pipeline
Sanofi has announced that it has finalised its acquisition of Vigil Neuroscience, a US-based biotechnology …
