January 28, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Sanofi Genzyme , the rare-disease subsidiary of Paris-based Sanofi , announced that it is expanding its administrative operations in Westborough, Mass. As a result, some employees from the Framingham, Mass. location will be relocated.
The company’s Westborough office is home to more than 500 employees. The company plans to lease another 53,879 square feet of space at One Research Drive, a 47 percent expansion, bringing the company’s total leased square footage to 167,901. An additional 300 staffers will be added, although it’s not clear if there will be new hiring, or merely transfers from the Framingham operations.
This is slightly different than what was reported late last week, that Sanofi was rumored to be announcing layoffs. Those cuts could still happen. An announcement is expected before Feb. 9, when Sanofi is scheduled to release its annual financial report.
On Nov. 6, 2015, the company’s chief executive officer, Olivier Brandicourt, announced a new strategy for the international conglomerate, including attempts to boost its sagging diabetes sales. It also plans to expand into new markets and is in the process of evaluating the spinoff of its animal health unit, Merial and its European generics business.
Sanofi made a failed bet on a version of inhaled insulin, Afrezza, in a deal with Valencia, Calif.-based MannKind Corporation . However, Afrezza sales fizzled, and after months of rumors, on Jan. 5 Sanofi ended its licensing and collaboration deal with MannKind Corporation.
This is such a blow to MannKind, that there is now speculation that MannKind may be up for sale or on the path to bankruptcy.
Part of Sanofi’s announced strategy has been a return to partnerships and acquisitions. In November, it announced a licensing deal with Seoul, South Korea-based Hanmi Pharmaceutical, Co., Ltd. worth $4.2 billion to develop several diabetes treatments. At the same time, it announced a collaboration and license deal with The Woodlands, Texas-based Lexicon Pharmaceuticals, Inc. to develop and commercialize sotagliflozin, a possible diabetes treatment.
“Brandicourt is being realistic,” Alistair Campbell, an analyst at Bernberg Bank in London told BloombergBusiness at the time. “He’s inherited this business that had a problem with the diabetes franchise before he arrived. He needs to move people on from the diabetes franchise and try to focus on the other growth areas.”
Brandicourt has indicated he plans to cut $1.63 billion in costs over the next five years. One of those new areas he plans to expand into is cardiac care, with the launch of its cholesterol drug, Praluent, last July. It also has Aubagio and Lemtrada to treat multiple sclerosis.
Not that the company has abandoned the diabetes market. In addition to the deals with Hanmi and Lexicon, it inked a deal in August with Google/Alphabet’s Verily, formerly Life Sciences, to develop diabetes therapies and monitors.
The company also has numerous promising pipeline products, and indicates it plans to launch up to 18 new drugs by 2020. Six of those drugs, Toujeo, Praluent, Dengvaxia, sarilumab, LixiLan and dupilumab, have been projected to have peak aggregate sales of €12 to €14 billion by 2025.
Although investors have been tough on the company, some analysts see a turnaround. Nick Davis, a fund manager with UK-based Polar Capital, told Barrons “You have to take a three- to five-year view. Sanofi’s product pipeline is improving, and it has some high-profile launches coming up.”
Credit Suisse analyst Rebekah Harper agrees, telling Barrons, “Sanofi still offers significant value on enterprise value/net present value versus EU major pharma peers, but the new chief executive officer will need to convince already-wary investors that he can either make good the diabetes-sales shortfall, or drive margin acceleration hard to close this valuation gap.”
