07.22.09
#2 Sanofi-Aventis
174 Avenue de France, 75013 Paris, France
Tel: (33) 1 5377 4000 Fax: (33) 1 5377 4296
www.sanofi-aventis.com
Headcount | 98,000 | |
Year Established | 2004 | |
Pharma Revenues | $40,562 | +5%/-2%* |
Total Revenues | $40,562 | +5%/-2%* |
Net Income | $10,399 | +7%/-1%* |
R&D Budget | $6,731 | +8%/-1%* |
* converted at avg. exch. rate / based on local currency (Euro)
2008 Top Selling Drugs | |||
Drug | Indication | Sales | (+/-%) |
Lovenox | thrombosis | $4,029 | +13% |
Plavix | heart attack, stroke | $3,849 | +16% |
Lantus | diabetes | $3,605 | +29% |
Taxotere | cancer | $2,991 | +16% |
Eloxatin | colorectal cancer | $1,983 | -5% |
Avapro | hypertension | $1,769 | +19% |
Ambien | insomnia | $1,220 | -29% |
Allegra | allergic rhinitis | $1,012 | +5% |
Copaxone | multiple sclerosis | $915 | -43% |
Delix | hypertension | $715 | -26% |
Menactra | meningitis vaccine | $594 | +4% |
Amaryl | diabetes | $569 | +6% |
Account for 57% of total pharma sales, down from 58% in 2007.
* SA earned $1.13 billion from vaccines for polio, whooping cough and Hib and $1.08 billion from flu vaccines. However, the company does not break out sales of individual vaccines (except Menactra), so they are not included in our list of top sellers. Total vaccine sales in 2008 were $4.2 billion
PROFILE
Currency shifts helped move Sanofi-Aventis (SA) back to #2 in our ranks (the Euro managed to appreciate during 2008 while the GBPound dropped in value). It looks safe in that position, mostly because GSK’s patent cliff has come up a little sooner. But that doesn’t mean SA is sitting pretty; with several big expirations looming and few replacements on the horizon, France’s pharma champion needs to make some big moves.
The company made a splash in September 2008 when Chris Viehbacher, a GSK vet, was named chief executive officer, succeeding Gerard Le Fur. Mr. Viehbacher, who is not French, has quite a job ahead of him if he wants to position SA to recover from its own patent cliff.
The Lowe Down
As I write, Sanofi-Aventis is beset with reorganization rumors. Word is that their new CEO wants to make a major push into vaccines, OTC drugs, and generics, although those last two seem rather odd companions with the first. These are probably the aftershocks of some of the problems the company’s experienced the last few years — the failure of rimonabant and the craziness with Plavix, just to pick two. Maybe the company’s upper management feels that they’ve been burned by small-molecule proprietary drugs, and has resolved that in the future they’ll be burned by something else? Restructuring shouldn’t come as much of a surprise, though. S-A has the look, from outside at any rate, of an unwieldy beast. There are an awful lot of former companies packed in there, for one thing. Maybe the emphasis on the OTCs and generics comes from a longing for stability, after the huge swings of the past few years. I think that “stable” and “pharmaceutical company” don’t often have much business in the same sentence, but we’ll see how that goes for them. Until their new plans come out, perhaps it’s best to defer comment.—Derek Lowe |
The problem is, many of SA’s top sellers face generic erosion and patent challenges, and there aren’t a lot of products ready to step up and replace them. The biggest question is when a generic version of SA’s top seller will hit the market. In April 2009, the U.S. Supreme Court refused to hear a case to extend the patent protection for Lovenox, opening the door for generic competition.
But because of the legal wrangling and the complexity involved in making Lovenox, the initial period of generic exclusivity seems to have expired for first-to-file Amphastar and Teva, but no one’s received FDA approval for an off-brand version of the $4.0 billion drug yet. In Europe, a generic version of the drug will have to include results from at least one “adequately powered” clinical trial, which will surely raise the cost of development beyond the scope of most generic marketers. No word on what it’ll take for a U.S. marketer to gain approval.
In June 2009, SA’s patent for cancer treatment Eloxatin was deemed invalid, opening the door for generics to go after that $2.0 billion drug ($1.3 billion in U.S. sales). SA plans to appeal that decision, but Teva and Hospira plan to get approval and start a-sellin’. A generic of Plavix is already on the market in Germany, cancer treatment Taxotere loses protection in May 2010 (if not sooner), and there may be a cheap version of Ambien CR (yay!) coming soon in the U.S.
So if you can’t beat ‘em, join ‘em! One of SA’s new strategies has been to build up its branded generic network, spending $2.6 billion to add Zentiva and gain entrée into its central/eastern European market, while also picking up companies in Mexico and Brazil. SA pointed out in its 1Q09 statement that these acquisitions would have lifted 2008’s generic sales from $500 million to $1.75 billion.
Where else are the new revenues going to come from? In November 2008, a month before Mr. Viebacher officially took the reins, SA finally threw in the towel on one its onetime darling, obesity/smoking cessation drug Acomplia. The move followed an October recommendation by the EMEA to suspend marketing the drug, due to the risk/benefit profile (likely the same suicidal thoughts and depression events that led the FDA to reject the drug outright). Fewer than two weeks later, SA announced that it was discontinuing all clinical trials of Acomplia, pulling the plug on a treatment that was once supposed to bring in billions of dollars (or Euros) each year.
Acquisition News
Target: BiPar Sciences Price: $500 million (with milestones) Announced: April 2009 What they said: “This acquisition illustrates our strong commitment to oncology to provide patients, physicians and public health stakeholders with breakthrough medicines addressing unmet medical needs.” —Christopher A. Viehbacher, CEO of sanofi-aventis Target: Medley Price: $700 million Announced: April 2009 What they said: “This acquisition will enable sanofi-aventis to reinforce its number one ranking among pharmaceutical companies in Brazil, with a total 12% market share. Sanofi-aventis will become the leading player in the field of generics in Brazil and in Latin America.”—company statement Target: Laboratorios Kendrick Price: undisclosed ($35 million in 2008 revenues) Announced: April 2009 Target: Acambis Price: $527 million Completed: September 2008 What they said: “This acquisition is a logical and strategic step, building upon Sanofi Pasteur and Acambis’ decade long partnership to develop novel vaccines.”—Wayne Pisano, President and CEO, Sanofi Pasteur Target: Zentiva NV Price: $2.5 billion Completed: March 2009 What they said: “Zentiva brings a large portfolio of branded generic drugs and affordable medicines, which is well adapted to market dynamics and patients needs in this region [Czech Republic and environs].”—Chris Viehbacher, CEO |
Where one door shuts, maybe another opens. Back in 2006, SA’s Multaq, a treatment for atrial fibrillation, was rejected by the FDA because of increased deaths in a trial. The companyinitiated a new trial of 4,600 patients and received an advisory panel recommendation (10 to 3) in favor of use in that indication, but not for patients with severe heart failure, and not with the claim that the drug reduces risk of death. Some panelists recommended a “black box” warning to make sure doctors would not inadvertently use Multaq on higher-risk patients. The drug is under priority review with the FDA, for what that’s worth.
In what appears to be a concession to the realities of pharma R&D, Mr. Viehbacher commented in a Wall Street Journal interview that he’d like to take half of the R&D money that’s spent on preclinical and early-stage studies and spend it on partnerships with small companies to fund their drug development. Optimally, he said, he’d like to see half of SA’s marketed drugs come from outside companies. At present, it’s closer to 10%. So if we see a big number of R&D layoffs, you’ll know which way the company’s heading.
SA took the opportunity to weed some projects out of its portfolio. Among the late-stage casualties: saredutant (depression), AVE5530 (hypercholesterolemia), TroVax (cancer vaccine, with the rights kicked back to Oxford BioMedica), and the Unifive pentavalent (DTP-HepB, Hib) vaccine. Following the review, SA reported that it has 51 projects in clinical development (NMEs and vaccines), with 21 in either Phase III or registration. Between vaccines (35%) and biologics (14%), nearly half of SA’s pipeline is large molecule.
Along with its generics push, SA’s been working hard to make itself a giant in the vaccine field, adding facilities in Pennsylvania, France and Mexico, acquiring Acambis, and gaining contracts for both emergency supplies and national immunization programs. Vaccines accounted for 10% of SA’s $40 billion in 2008 revenues. A company statement contends that worldwide vaccine sales could double to $34 billion by 2016 and that SA’s internal vaccine revenues could reach 15% of total sales. SA has certainly put itself in good position to dominate in the vaccine market next decade, provided we don’t all die of some horrible pandemic before then.
Reporting on fiscal 2008, the company warned that it had “initiated a wide-ranging transformation program,” with three main themes:
- Increasing innovation in R&D
- Adapting structures to meet the challenges of the future, and
- Exploring external growth opportunities.
Shortly before press time, it announced that it will close or sell off eight of its 27 R&D facilities in the next several years — five in France and the remainder in the U.S., Japan and the UK — and focus its efforts on diabetes, cancer, age-related disease, inflammatory disease and anti-infectives. “Tomorrow’s research will be carried out through networks. We will be open to knowledge from outside sources,” said Marc Cluzel, Sanofi’s head of R&D.
In early June, another rumor cropped up that Mr. Viebacher had gone to the board of directors with a proposal for a hostile takeover of a U.S. pharma company (Amgen? Allergan? BMS?), but was rejected. All sides have denied that report, but it’s not hard to see why SA would try to buy its way out of a multi-year pipeline drought.
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