Life By a Thousand Cuts
At GSK, Viehbacher won praise for unifying the clashing cultures and business of Glaxo Wellcome and SmithKline Beecham following
their 2000 merger. If Sanofi-Aventis is a national treasure based in the City of Light, it's a remarkably far-flung one, the
result of three decades of mergers and the consolidation of more than 200 individual companies (see chart).
The scuttlebutt on the Café Pharma Web site about the appointment of Vieh-bacher to head Sanofi was expressed most succinctly
by this comment: "He will not be here for long. Paris wants to clean house, but not have a Frenchie do it. Once the company
is restructured, he will be history and someone in Paris will again get the job."
"It's not my objective to just be known as a cost-cutter," Viehbacher says. "You can't save your way to growth."
Yet after taking over on December 1, Viehbacher's first order of business was to hand pink slips to 10 percent of Sanofi's
6,500-person global sales force. As the French union CTG picketed outside headquarters, Viehbacher next took aim at management—and
Dehecq's dauphins. Heads rolled. Only two of the ancien régime remain: Marc Cluzel, who replaced Le Fur as head of R&D in 2007; and Hanspeter Spek, the longtime head of pharma operations.
Viehbacher set about restructuring top management with a series of newly defined positions intended to conform to the firm's
newly defined priorities. He promoted Laurence Debroux as chief strategic officer (in charge of M&As) and Jean-Pierre Lehner
as chief medical officer (in charge of drug safety). He hired a new chief financial officer: Jerome Contamine of the French
water and sewage group Veolia Environnement. Elias Zerhouni, the former director of the National Institutes of Health under
President George W. Bush, was brought on as scientific advisor. (Gregory Irace remains at the helm of Sanofi US, with the
addition of Paul Chew as chief medical/science officer.)
Jean-François Dehecq, age 69, remains chairman of the board. Says Viehbacher, "He is not your average chairman of the board.
This is the man who built this company, who knows every individual, every site, and has a passion for it." Yet the legacy
of this titan of French industry, badly damaged in recent years, now depends entirely on Viehbacher and his next-generation
Be they big wigs or bag carriers—likely no one at Sanofi is feeling secure under the new regime. And as Pharm Exec went to press, the business media were rife with rumors that another "restructuring" was in the offing.
"It's clear that Viehbacher has a mandate from the board," says Stan Bernard. "It's his company for now."
Says Viehbacher: "My DNA, and I guess my cultural upbringing, kind of sit pretty well for this role."
In fact, his account of how he fell into a pharma career is instructive. "I moved to Germany with Price Waterhouse. Wellcome
was one of my clients. It was 1988, and they were launching AZT for HIV—the first drug for this massive health crisis," he
recalls. "The company actually got into all kinds of difficulties because they'd done something great but were instantly criticized—pricing
issues, viral resistance."
He both tangled with and teamed with patient activists. "Going to every one of the world's AIDS congresses, I saw the hope."
It was a point of pride, he says, that the Glaxo booth in the exhibition hall was one of the few not trashed by angry protesters.
No More Acomplias!
In an April interview in The
Wall Street Journal, Viehbacher said he'd "like to take a major chunk"—about half—of the preclinical/early-stage R&D budget and spend it on external
partnerships with small pharmas and biotechs boasting promising platforms and compounds.
"Working in pharma is not like selling bottled water," he says. "We have an obligation to come up with new medicines. That's
what I've said to our R&D folks. I'm not going to chase around the bush here. We can't keep spending $6 billion a year on
R&D and not come up with anything.
"The question I pose is: 'How are you going to make someone's life better with this drug, and why is it better than what they've
already got?" If you can't answer that question, I don't really care about molecular structures, or whether this is genomically
interesting, or that it's a nifty technology platform. In today's world, we all know you need medicines of value."
Sanofi suffers from an Acomplia hangover. Acomplia (rimonabant) was arguably the most embarrassing bomb of the past decade.
Advance press for what was then the Sanofi-Synthelabo obesity drug had been extraordinary, and getting Aventis' big US sales
force to market the drug was a key driver of Sanofi's earth-shaking $65 billion takeover of its largest German rival. ''We
needed more muscle to sell such a product,'' Le Fur, then head of R&D, told The New York Times in 2004. "We knew the first results of the trials back in January. Knowing that, it was more or less linked to the deal.''
As the most promising in a new class of inverse agonists that block the cannabinoid receptor CB1, its anti-"munchies" effect—cutting
down on the "craving" impulse—captured the popular imagination. Midstage tests showed promise in a wide range of disorders,
including obesity, diabetes, high cholesterol, even smoking cessation.
New York Times' Gina Kolata captured the prevailing hype nicely: "It will make a person uninterested in fattening foods, [as] they have
heard from news reports and word of mouth. Weight will just melt away, and fat accumulating around the waist and abdomen will
be the first to go. And by the way, those who take it will end up with higher levels of HDL, the good cholesterol. If they
smoke, they will find it easier to quit. If they are heavy drinkers, they will no longer crave alcohol."
At a time when the Vioxx scandal had sent skepticism about the industry through the roof, Sanofi's breakthrough promised some
redemption. Analysts estimated that the drug could easily pull in $4 billion a year two years after launch. Sanofi bankrolled
Phase III trials that ultimately enrolled some 24,000 people worldwide before it had to pull the plug.
Not surprisingly, interrupting hunger-producing receptors produces a host of secondary CNS effects. People taking Acomplia
reported twice as many psychiatric problems as those on placebo. In 2006, the EU approved the drug, but with warnings restricting
its use. FDA dragged its feet, issuing one approvable letter after another, as negative safety reports piled up. While Acomplia's
weight-loss benefits (barely) hit the agency's 5 percent mark, the CNS risks doomed its chances. Last October, regulators
ordered Sanofi to yank the drug from the EU, too.
At its peak, Acomplia was approved in 38 countries worldwide, but its total sales barely broke the $200 million mark. Proponents
of the drug argue that with careful monitoring Acomplia could have helped many chronically obese people. In retrospect, it's
easy to fault Sanofi's insular leadership for its irrational exuberance. The firm's investment (of every sort) in this fascinating
but flawed chemical blinded it to the writing on the wall: Cutting-edge science alone will no longer cut it.
The folly ended when Sanofi's two biggest shareholders, the oil conglomerate Total and the cosmetics hydra L'Oreal, began
dumping stock in an ongoing plan to abandon their combined 25 percent position. Le Fur took the bullet.