Sanofi May Move Out of Paris HQ to Save Money
March 21, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Paris-based Sanofi might become Gentilly-based Sanofi, according to company insiders. Rumors are now floating that as part of the company’s cost-cutting efforts, plans are being considered to abandon the company’s headquarters in pricey Paris and move to Gentilly, where the company already has offices.
When Olivier Brandicourt took over the company after Chris Viehbacher’s ouster in 2014, his new strategy focused on bolstering the company’s sagging diabetes market, pushing into other markets, evaluating the spinoff of its animal health unit, Merial, and its European generics business. He also wanted to restructure the company, create efficiencies and cut costs.
Part of the plan is to slash $1.63 billion in costs over the next five years.
Currently about 700 people work at the company’s headquarters in Paris at the Belle Epoque building at 54 rue La Boetie, in the eighth arrondissement near the Champs Elysees. It moved there in 2012 after remodeling the site, which was the headquarters of Alcatel-Lucent SA prior to the move. Before moving to that location, Sanofi headquarters was located in southeastern Paris.
Reportedly a shift out of Paris to the suburbs would save the company millions of euros.
Most recently, Sanofi and its partner Tarrytown, N.Y.-based Regeneron Pharmaceuticals suffered a legal blow when a jury came down on the side of Thousand Oaks, Calif-based Amgen in a patent lawsuit. Sanofi and Regeneron developed a cholesterol drug, Praluent, that uses a similar mechanism of action as Amgen’s Repatha.
Sue Robinson, the U.S. District Judge who presided over the trial, is expected to make a decision by March 23 or 24 on whether Sanofi/Regeneron can continue to sell Praluent. That outcome would be unusual. Most analysts believe Sanofi/Regeneron will be forced to pay royalties to Amgen on sales of Praluent ranging from five to 10 percent. Sanofi/Regeneron have indicated they plan to appeal the jury verdict.
Other changes for Sanofi have involved the expansion of Sanofi Genzyme ’s administrative operations in Westborough, Mass. Genzyme is the company’s rare-disease subsidiary. The company is adding another 53,879 square feet of space with the addition of another 300 staffers. Genzyme, which had abandoned cancer research, has folded some cancer research back into its operations.
The company also laid off workers in Massachusetts. It also plans to eliminate several hundred jobs in France. On Feb. 1, Sanofi executives met with French union representatives to discuss the company’s restructuring plans. About 296 research and development jobs that were expected to be filled in France were being eliminated. Another 100 corporate jobs in France were being slashed, and another 155 jobs in Sanofi’s commercial areas were being axed.
Part of the strategy is to try and get more productivity from its workers. According to Bloomberg, Sanofi ranks nine out of ten on sales per employee among the ten biggest pharma companies. Chicago-based AbbVie ranks number one, with almost $800 million in sales per 1,000 employees. Pfizer is number two with about $640 million per 1,000 employees.
In comparison, Sanofi reports about $400 million per 1,000 employees, below Novartis , with about $425 million per 1,000, but above GlaxoSmithKline , with about $375 million per 1,000 employees.