Sanofi's Shock Therapy Enrages the Frenchhttp://www.businessweek.com/articles/2012-08-09/sanofis-shock-therapy-enrages-the-french








By Albertina Torsoli on August 09, 2012







Among the major French companies that have triggered protests at home this summer by announcing job cuts, Sanofi (SNY)
stands out for its audacity. France’s biggest drugmaker plans to slash
its research and development staff in Toulouse and Montpellier and is
shifting its focus across the Atlantic to Cambridge, Mass.Since
becoming the company’s chief executive officer in 2008, Canadian-born
Chris Viehbacher has irked Sanofi veterans by ending projects that have
been deemed unpromising, axing jobs, and embracing acquisitions and
partnerships. The changes accelerated last year, after the company
bought Cambridge-based Genzyme, the world’s largest maker of treatments
for rare genetic diseases, for $20.1 billion in a hostile takeover. Viehbacher
says he hopes some of Genzyme’s innovative culture will rub off on
Sanofi and help both companies develop drugs. Sanofi’s profitable drugs,
such as the blood thinner Plavix, are losing ground to generic
medicines. “Out of our research in France, we haven’t really developed a
new molecule in 20 years,” he told reporters last month on an earnings
call.To change that, Viehbacher reorganized Sanofi scientists
into more flexible teams, drawing from Genzyme’s experience. Having
already grouped some cancer drug research and vaccine operations in
Cambridge, he placed a Genzyme executive in charge of Sanofi’s U.S.
business development. “Genzyme has changed everything for Sanofi’s
research,” says Vincent Meunier, an analyst at Exane BNP Paribas in
Paris. “It meant a complete restart at Sanofi, a new foundation in the
U.S. Cambridge is now the center of the world for them in terms of
R&D.”French politicians and labor leaders aren’t thrilled.
“Sanofi is turning its back on its home country,” says Jean-Louis
Chauzy, a former union official and president of the government economic
council representing the Midi-Pyrénées region, including Toulouse. The
decision to shut Sanofi’s Toulouse outpost, where Plavix was born,
shocked local officials because in March the company signed a
partnership with the Toulouse-based Claudius Regaud Institute and other
government agencies as part of a plan to build a hub for cancer research
in the city, a plan that may be in doubt.It’s not only France
that’s taken a hit. Sanofi, which employs 110,000 workers, recently laid
off research staff in Germany, Hungary, and Italy, and announced the
closure of its longtime U.S. research and development site in
Bridgewater, N.J. The coming overhaul may cost as many as 2,500 jobs in
France, says Jean-Francois Chavance, a representative of the French
Democratic Confederation of Labour. That’s in addition to about 4,000
positions eliminated there in the past three years. Some things in
France haven’t changed, however: More details won’t be clear until the
nation returns from its August holiday next month. The bottom line:
France’s biggest drugmaker is radically shifting its strategy toward a
U.S. model and is moving research operations away from home.