Sanofi Considering Additional Restructuring and Up to 1,000 Job Cuts
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Paris-based Sanofi is reported to be considering cutting hundreds of jobs. According to a brief report by Reuters, the drug company plans to hold meetings with staff representatives tomorrow and Monday of next week to describe a restructuring plan, according to four sources familiar with the matter.
The company seems to go through a yearly spate of job cuts. In June 2019, Sanofi announced plans to restructure its research-and-development operations in Germany and France, cutting 466 jobs in the two countries. The idea was to focus its research efforts on cancer, immunology, rare diseases and vaccines.
It planned to halt new research in cardiology indications but keep existing programs. It also planned to refocus its diabetes research on the root causes of the disease but continue developing its current diabetes pipeline.
In January 2018, the company announced major restructuring, which cut 400 jobs in the U.S. Again, the diabetes market was the focus of the cuts. This is an area that many companies with significant interests in have struggled with. Eli Lilly and Novo Nordisk, for example, have made major cuts related to downward pressure on diaetes drug prices, with Novo Nordisk cutting 1,000 jobs in 2016 and Lilly cutting about 3,500 in 2017. In October 2017, Merck, which also has a strong presence in the diabetes market, cut 1,800 sales jobs.
Labor unions in France are particularly strong, so cutting jobs in the country is generally extremely difficult for Sanofi to do.
Although details are few, two sources suggest there may be approximately 1,000 jobs cut in France.
The timing is interesting. On June 23, only two days ago, Sanofi Pasteur, the vaccines business unit of Sanofi, and Lexington, Massachusetts-based Translate Bio announced the expansion of an existing collaboration to develop messenger RNA (mRNA) vaccines for infectious diseases. The original deal was signed in 2018.
Under the new expansion, Sanofi is paying Translate Bio $425 million up front, with $300 million in cash and $125 million a private placement common stock investment at $25.59 per share, a 50% premium on the 20-day moving average share price before signing. Translate Bio will be eligible for possible milestones and other payments up to $1.9 billion, which includes $450 million that fell under the 2018 agreement.
Of the possible milestones, about $360 million are expected over the next few years, including COVID-19 vaccine development milestones. Also, Translate Bio is up for tiered royalties based on global sales of any developed vaccines.
Sanofi is paying all costs during the collaboration period. Sanofi Pasteur will receive exclusive global rights for infectious disease vaccines.
“As all eyes are on prevention of infectious disease through vaccines, this is a pointed moment in time where we are called upon to seek innovative ways to protect public health,” said Thomas Triomphe, executive vice president, Sanofi Pasteur. “We are excited by the novel technology and expertise Translate Bio brings, and we believe that adding this mRNA platform to our vaccines development capabilities will help us advance prevention against current and future infectious diseases.”
The deal will give Sanofi about a 7.2% stake in Translate Bio in addition to the broad rights to vaccines. Sanofi expects its mRNA COVID-19 vaccine candidate to enter the clinic by the end of the year, and if everything goes well, could be up for regulatory approval in the second half of 2021.
Translate Bio specializes in mRNA therapeutics. Under the partnership, Translate Bio is leveraging its mRNA platform to discover, design and manufacture vaccine candidates. Sanofi Pasteur is one of the leading vaccine companies in the world and will both advise and assist in advancing those candidates into clinical trials, regulatory applications and commercialization.
In addition to multiple COVID-19 vaccine candidates, the two companies are working on an mRNA vaccine candidate against influenza with plans to begin clinical trials in mid-year 2021. There are also other mRNA vaccine development programs they are working on involving another virus as well as a bacterial pathogen.
On the same day, Principia Biopharma, based in South San Francisco, announced the first patient had been enrolled in its partner Sanofi’s Phase III trial of SAR442168 in relapsing multiple sclerosis (RMS). Upon dosing, Sanofi is to pay Principia a $50 million milestone payment.
SAR442168 is a Bruton’s tyrosine kinase (BTK) inhibitor that can cross the blood-brain barrier. It modulates immune cell function in the peripheral and central nervous system and has shown promise in central nervous system diseases. The drug was discovered by Principia.
Earlier this month, Sanofi announced plans to increase its vaccines research and production capabilities. As part of the plan it will invest $679.4 million (€610 million) to create a new production site and a research center, both in France, both dedicated to vaccines.
“Sanofi’s heart beats in France,” said Sanofi’s chief executive officer Paul Hudson in an oddly poetic statement. “We have a long history and exceptional teams working throughout the country, embodying our strong values. By investing in a new industrial site and a R&D center, Sanofi positions France at the core of its strategy, aiming to make France a world-class center of excellence in vaccine research and production.”
The company’s Evolutive Vaccine Facility (EVF) will be based in Neuville sur Saone. This industrial site will leverage the latest innovative vaccine production technologies. The company will invest €490 million over a five-year period, with plans to create 200 new jobs.
Sanofi Pasteur is Sanofi’s vaccine company and it will utilize the manufacturing site to handle any new pandemics. Sanofi indicates that EVF “is a new type of factory designed around a central unit housing several fully digital production modules that make it possible to produce three to four vaccines simultaneously, versus only one in current industrial sites. This modularity will make it possible to prioritize the production of a specific vaccine in a more timely manner based on public health issues.”