The Real Deal
Yet as profitable as the PARP inhibitors promise to be, they don't solve the problem of Sanofi's looming patent cliff. For
that matter, it will take another 20 years for China to make an impression on the firm's income statement.
Like other Big Pharmas, Sanofi needs sales fast. "We have 24 months to make the company ready for the loss of Plavix," an
anonymous Sanofi exec told The
Wall Street Journal's Jeanne Wahlen. "Lower costs and stronger emphasis on generics" are key to future growth.
The company has already begun beefing up its copycat capabilities. Sanofi paid $2.5 billion last fall for Zentiva, the Czech
generics maker, opening the door to markets in Russia, Turkey, and the rest of the eastern EU. Viehbacher followed up that
deal with back-to-back buyouts of Medley, Brazil, and Kendrick, in Mexico, two of Latin America's leading generics producers.
As savvy as these twofer diversification tactics may be—snapping up low-price copycat companies in high-growth emerging markets—they
ultimately fall short of the target
Says Viehbacher: "Everything I am doing is trying to think about what does the company look like in 2013— the year after the
patent cliff. I've got these growth platforms like vaccines, like OTCs, like branded generics, an extremely strong global
footprint in emerging markets.
"And I've been very honest that we don't have enough new products—therefore I do need to do some transactions. But what I
don't want to do is just sort of 'get bigger.' To me it's not a question of size. It's how do you make your company stronger?
And there is no magic bullet. "
For several months, Sanofi was reported to be hot for Solvay's pharma unit, which boasts 10 late-stage compounds in cardio,
CNV, and vaccines—a fine fit with Sanofi's portfolio. But according to the Financial Times, the $6 billion bid was too low.
Sanofi may opt to raise its stake in generics rather than biologics, with Actavis and Ratiopharm. Crucell/, the last major indie vaccine maker, also makes the list. Still, rumors of a megamerger hound him.
Some analysts argue that as Pfizer-Wyeth, Merck-Schering, and Roche-Genentech move from deal to real, the bigger-is-better
law of the pharma jungle will once again assert itself, forcing Viehbacher's hand.
"For better or worse, the industry is still consolidating," says Funtleyder. "It's inevitable that Sanofi will be a part of
The most oft-named target is BMS, with which Sanofi shares coparenting duties for Plavix and Avapro—and their life cycle management.
In addition, BMS CEO James Cornelius has been selling off non-pharma divisions while pursuing his "string of pearls" small-acquisitions
strategy, which is likely to appeal to Viehbacher. Less appealing is BMS's own huge patent cliff, which could blow a 50 percent
hole in sales by 2012.
Other rumored takeover targets include Amgen, the number one biotech with its bevy of anemia and autoimmune products; and
Biogen Idec, the bicoastal biotech specializing in multiple sclerosis.
According to the French business paper Les Echoes, the refusal to roll the dice on a major merger comes not from Viehbacher but from his two biggest investors. An Amgen acquisition,
for example, would run about $50 billion, possibly entailing loans and debt at a time when Total and L'Oreal are politely
washing their hands of the French national treasure. As a result, they'd put the kibosh on any move that might risk Sanofi's
On a June visit to Zentiva's headquarters in Prague, Viehbacher let drop that a major restructuring was in store at Sanofi,
while leaving the details a mystery. "We have a number of things to address in terms of how we get our people to work together,
how we can provide more latitude for creativity, how we can develop them scientifically, and how we can encourage external
collaboration—because there is a world of science out there."
And, of course, there will be more deals. "I just can't tell you when, because I do not know when the fish is going to bite,"
In his brief tenure, he has already clocked many thousands of miles in air travel and spent billions in biotech dollars, and
found time to pay "only the odd visit to my wife and three children." Where does Viehbacher's drive come from? Is it the money?
His early childhood? The dynamism Viehbacher has introduced is undeniable. "He's the real deal," says Heybrook. "He's confident
enough to allow communication and contention to emerge and not to need to hide behind an entourage. He can inspire people
to follow him."
But according to Viehbacher, it works both ways. "It goes beyond earnings per share—it goes beyond managing organizations,"
he says. "I love working with great people, and if you've got a great objective, a noble cause, a team you trust—to me there's
nothing better in life."