Sanofi-Aventis

Sanofi-Aventis' HQ in Paris

 Like all of its contemporaries, Sanofi-Aventis is undergoing a thorough reinvention of its business model and working practices.

Market dynamics aside, the biggest factor behind this is the arrival in late 2008 of a new chief executive Chris Viehbacher.

Formerly a senior GSK executive, Viehbacher laid out his vision to renew the company in early 2009, and set out a strategy to have greater investment in non-prescription business sectors, and in emerging markets.

The keynote is diversification in the company's business model.  Viehbacher says the  pharma industry as a whole has until now focused on developing small molecule drugs for a western population, and now needed to become truly global in outlook, and look beyond the small sliver of the world's population currently targeted.

This would mean shifting towards lesser dependence on the blockbuster model. Viehbacher commented in his inaugural press conference in January 2009 that no pharma company had ever managed to move smoothly from one blockbuster to another without patent expiry problems.

"I don't believe that the blockbuster model is dead - I just don't believe that you can bet the ranch on delivering products of that value," he said.

He admitted that Sanofi faces problems in the next few years, with more than 20% of sales at risk from generics in the period from 2009-2013.

"Although we have a lot of exciting products in development, they are not going to be able to compensate for the loss of revenues."

Outside the prescription pharmaceutical business, Sanofi has four further divisions - vaccines (Sanofi-Pasteur MSD) animal health (Merial), an OTC portfolio and its Winthrop generics business.

Income from all these divisions is around 7.5 billion euros annually, just a fraction of the 22 billion euros generated by prescription drugs, but Viehbacher indicated that strong organic growth and further acquisitions in these areas would boost their contribution in the coming years.

R&D reorganisation

The company also announced significant reorganisation in its R&D operations, with more than 30 molecules deemed not sufficiently viable and cut from development.

A comprehensive R&D reorganisation will be announced in April, with further cuts and rationalisation expected, and the possible introduction of external experts to help evaluate a pipeline drugs potential value.

Two new posts have been created to this end. Jean-Pierre Lehner, previously head of medical & regulatory affairs will take up the post of chief medical officer. The role will involve monitoring benefit/risk in pipeline and marketed drugs. The new position reflects the companys recent troubles with Acomplia, which was pulled from the market after growing concerns about its depression side-effects.

Meanwhile Dr Elias Zerhouni has been appointed to the new role of scientific advisor. A former director of the US government research institute the NIH, Zerhouni most recently worked with the Gates Foundation on developing new drugs for poorer nations.

Viehbacher says the role will centre on helping the company hit the right balance between in-house R&D and external partnerships and focused on a broad range of global health priorities.

2009 Results

Sanofi-Aventis made large gains in emerging markets, vaccines and consumer healthcare last year, helping produce 8.5 billion euros in net income for 2009, an increase of 12.8%.

Chief executive Chris Viehbacher identified five key growth factors that have driven profits forward in 2009 and will remain as the fundamental areas of the company’s future.

He cited emerging markets; diabetes brands; vaccines; consumer healthcare; and new products – namely, Multaq and Pentacel, as the company’s key growth drivers and said there were responsible for 50% of the company’s total sales.

These reached 29.3 billion euros for the year, an increase of 5.3%.

The increasing use of emerging markets was a key part of the strategy Viehbacher set out last year and in the last 12 months sales in those countries grew by19% to make up 25% of total sales.