Sanofi CEO Aims to Slim Down Company and Put Some Assets Under Review

November 6, 2015
By Mark Terry, BioSpace.com Breaking News Staff

Olivier Brandicourt, chief executive officer of Paris-based Sanofi , provided the company’s new strategy today, focused, not surprisingly, on bolstering the sagging diabetes market, pushing into other markets, and evaluating the spinoff of its animal health unit, Merial, and its European generics business.

Part of the new strategy is to return to the development of partnerships and acquisitions. Yesterday Sanofi announced it had signed a licensing deal with Seoul, South Korea-based Hanmi Pharmaceutical, Co., Ltd worth $4.2 billion to develop several diabetes treatments. Today it announced it had entered a collaboration and license deal with The Woodlands, Texas-based Lexicon Pharmaceuticals, Inc. to develop and commercialize sotagliflozin, a potential diabetes treatment. Sotagliflozin is a new oral dual inhibitor of sodium-glucose cotransporters 1 and 2 (SGLT-1 and SGLT-2).

The drug, LX4211, is currently in two pivotal Phase III trials in type 1 diabetes, with top-line results expected in the second half of 2016. Phase III trials in type 2 diabetes are expected to start in 2016.

“Brandicourt is being realistic,” Alistair Campbell, an analyst at Bernberg Bank in London told BloombergBusiness. “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.”

Part of Brandicort’s plan is to slash $1.63 billion in costs over the next five years. “I am defining new priorities for Sanofi,” Brandicourt said at the meeting. “The company will remain diversified, but with a portfolio refocused on areas where we can win, and innovation driven to improve the lives of millions of people.”

Part of the new focus will include Praluent, Sanofi’s new cholesterol drug that launched in July, and another insulin project, Toujeo, and Aubagio and Lemtrada for multiple sclerosis. The company also signed a deal in August with Google/Alphabet’s Life Sciences to develop diabetes therapies and monitors. And although its inhaled insulin product developed with MannKind Corporation has gotten off to a slow start, many analysts think it’s only a matter of time before Sanofi works things out with insurers and the public gets hold of a diabetic treatment that doesn’t involve shots.

Sanofi also has a number of promising products in its pipeline, and hopes 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.

Dengvaxia is a vaccine against Dengue Fever. Sarilumab is a fully human IL-6 receptor antibody for the treatment of rheumatoid arthritis. LixiLan is a form of long-acting insulin to treat diabetes. Dupilumab is being developed to treat moderate-to-severe asthma.

As part of his goals, Brandicourt created a compound annual sales growth target of 3 to 4 percent between 2015 and 2020. He would also increase the company’s research and development expenses by about 20 percent to €5 billion by 2020. But first, reports The Financial Times, Brandicourt has to work with the French labor unions in order to reorganize the company and reshape its manufacturing network. He indicated that cost cutting would be global and only “a few hundred” jobs would be cut in France over several years, and mitigated by retirements and voluntary early retirements.