Posted: May 1, 2013 |  AUTHOR: KEN FOX | CONTACT ME

 

I first heard about a French giant pharmaceutical company Sanofi-Synthelabo in the early 1990’s. At that time, their U.S. headquarters was located in New York City. Athough they typically discovered important drugs and licensed them to large pharmaceutical companies such as Bristol Myers and others, they were not well known among consumers. The company has a long French of evolving and merging French and German chemical and pharmaceutical companies, including Rhone Poulenc and Hoechst Marion Roussel. These two companies merged in 1999 to form a pharmaceutical company, Aventis, which was acquired by Sanofi-Synthelabo in 2004. The company has been called Sanofi-Aventis since 2004, and shortened to Sanofi in May 2011.

The company acquired Genzyme Corporation, based in Cambridge, MA for $20.1 billion in February 2011. It now has over 110,000 employees with their global headquarters in Paris and U.S. headquarters in Bridgewater, NJ. The company discovers and markets branded prescription pharmaceutical products under the Sanofi name* and generated annual sales of about $48.7 billion dollars in 2011, placing it among the top five largest pharmaceutical companies in the world.

Top 10 Largest Pharmaceutical Companies in the World (2011-2012)
Name Country Annual Sales (USD Millions)
1. Pfizer U.S. $67,425
2. Johnson & Johnson U.S. 65,030
3. Novartis Switzerland 59.375
4. Bayer Germany 50,790
5. Sanofi France 48,746
6. Merck U.S. 48,047
7. Roche Holding Switzerland 47,953
8. GlaxoSmithKline U.K. 43,905
9. Abbot Labs U.S. 38.851
10. AstraZeneca U.K. 33,591

Source: Global Industry Analysis, issued November 21, 2012

Sanofi focuses on the following six growth areas:
1. Diabetes solutions
2. Human vaccines
3. Innovative drugs
4. Rare diseases (including multiple sclerosis)
5. Consumer healthcare
6. Animal health

Sanofi currently operates five subsidiaries in addition to its base prescription pharmaceutical business:
1. Genzyme (Cambridge, MA, USA)-considered the world’s largest maker of medicines for rare genetic disorders (such as Fabry, Gaucher and Pompe disease).
2. Sanofi Pasteur-founded by Marcel Merieux, a student of Louis Pasteur. It was called the Merieux Biological Institute until 2004 when it changed its name to Sanofi Pasteur, which is the company’s vaccine division.
3. Chattem (Chattanooga, TN, USA) was acquired in March 2010 and sells over the counter products in the pain relief, skin and hair care, and health & wellness categories. Some of its better known brands include: ACT, Cortizone (cream), Gold Bond, Allegra, IcyHot, Selsum Blue, and Kaopectate.
4. Merial (Deluth, GA, USA) sells drugs and vaccines for pets and livestock in 150 countries. These include over-the-counter (OTC) and prescription products.
5. Zentiva (Prague, The Czech Republic) is a leading pharmaceutical company in Europe. It sells mainly branded generic pharmaceuticals, dietary supplements and cosmetics and operates in 32 markets.

My real knowledge of Sanofi surfaced when I worked with a company developing a vaccine to prevent dengue fever. Dengue is a viral disease spread by a specific type of mosquito (Aedes aegypti and Asian Tiger mosquito), especially breeding in countries with tropical climates. It is the most widespread tropical disease after malaria and is more challenging than other diseases because there are four strains of the virus. Reasons for the spread of this disease include increased world trade and the banning of previously effective pesticides such as DDT. Of the estimated 220 million people infected annually, two million—mostly children—develop dengue hemorrhagic fever (DHF), a severe form of the disease, which causes hospitalization and possible death. However, over the past few years Brazil has declared a national emergency to fight dengue. Additionally, the World Health Organization (WHO) has declared dengue a global crisis. The symptoms of the disease vary considerably, from aches and pains for two weeks (often undiagnosed) from Type 1 to being fatal in hemorrhagic fever (type 4). Also, getting the disease more than once or twice increases the chances of getting hemorrhagic fever.

Source: World Health Organization (WHO)

The disease used to be present in the U.S. and was called Break-Bone Fever, due to the pain it caused. It was mainly found in the southern U.S. but disappeared from (mosquito) eradication in the early 20th century. However, a June 28, 2010 NY Times article had this headline: “Dengue Re-Emerges in U.S., Spurring Race for Vaccine.” The virus was found in some people from Key West, Florida and others near the Texas-Mexico border.

There are no medications to treat or prevent dengue fever. Sanofi Pasteur along with GlaxoSmith Kline (GSK) are working on a vaccine to prevent the dengue virus. It has been extremely challenging because of the four types of dengue. However, Sanofi has been the recent leader in the search for a vaccine to address this virus. In doing so, it conducted a massive clinical trial among 4,000 children in Thailand. Results from this clinical trial were released in September 2012. They were not as favorable as hoped. Prevention results by type of dengue were as follows:
Type 1-61.2% effective
Type 2-not effective (eluded the vaccine)
Type 3-81.0% effective
Type 4-90% effective

The company will obviously continue to refine the vaccine to address type 2. Sanofi is also conducting clinical trials among children in Latin America (Brazil, Columbia, Honduras and Puerto Rico) and Asia (The Philippines, Malaysia, Indonesia and Vietnam).

Comments
Sanofi’s CEO, Chris Viehbacher, is a visionary with guts. His purchase of Genzyme was brillaint because it owns some breakthrough medications such as Lemtrad for multiple sclerosis and Zaltrap for cancer. He is not afraid to form risky alliances for potentially new scientific breakthroughs in areas such as TB( tuberculosis). Vienbacher is also committed to increasing Sanofi’s business in China. The company recently built a vaccine manufacturing facility in Shenzhen, and acquired a company with an established consumer health distribution system.

Sanofi, at the time of this writing, is the only pharmaceutical company listed in Warren Buffet’s short list portfolio. The dengue fever vaccine, assuming they eventually get it right, represents at least a billion dollar product. It further demonstrates the potential of vaccines, once looked down upon by major pharmaceutical companies in favor of an higher sales generating oral medications.

*Some of Sanofi’s better known or widely used human prescription medications include: Ambien, Aubagio, Eloxatin, Lovenox, Neulasta, Plavix and Taxotere

Sources:
1. Dengue Re-Emerges in U.S., Spurring Race for Vaccine, NY Times, June 28, 2010
2. Sanofi Pasteur Announces Publication in The Lancet of the World’s First Efficacy Results for it Dengue Vaccine Candidate, Lyon, France, September 11, 2012
3. Dengue Fever? What About It, Key West Says, The New York Times, July 23, 2010
4. Interview: Sanofi hopes to market dengue vaccine by 2015, Reuters, April 21, 2009
5. Sanofi Expects China to Be its No. 2 Market by 2015, Seeking Alpha/China Bio Today, May 12, 2011

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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, www.thesoundingsgroup.com. The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.

 

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