Sanofi won’t follow mega-merger plan like Pfizer’s, says CEO

By Gareth Macdonald

- Last updated on GMT

Related tags Clopidogrel

New Sanofi Aventis chief Christopher Viebacher has virtually ruled out major acquisitions, eschewing the trend started by Pfizer’s $68bn (€53bn) swoop for Wyeth in favour of an anti-mega merger stance like that adopted by UK rival GSK.

Viebacher, who joined from GlaxoSmithKline last year, said Sanofi would pursue smaller acquisitions in the $5-$15bn range, cut internal R&D spending in favour of external projects and “simplify​” its organisational structures.

Viebacher expressed scepticism about Pfizer’s strategy. In an interview with the UK’s Financial Times​ he said that: "the big deals of the past have not necessarily fulfilled the criteria of shareholder value​."

The plan is contrary to the recent suggestion by Frost & Sullivan analyst Shabeer Hussain that Sanofi would move for US drug major Bristol-Myers Squibb to maintain the momentum generated by its purchase of Czech generics firm Zentiva last year.

Viebacher also said that the firm may have “missed the boat​” on the move into biologic medicines and would work with governments and insurers to ensure it can "bring medicines of value to the marketplace​".

The general market response has been favourable. For example, Eric Le Berrigaud, an analyst at Raymond James, told Bloomberg​ that: “Viehbacher seems off to a pretty good start​,” and added that his merger comments were “rather positive​.”

While details of Sanofi’s small scale acquisition targets are yet to emerge, media reports suggest that Dutch company Crucell, which was a target for Wyeth prior to the Pfizer deal, and Icelandic generics firm Actavis are among the likely candidates.

The focus on generics would be in keeping with comments made by Vontobel Asset Management fund manager Romain Pasche during a Bloomberg TV​ interview. Pasche said that: “There are lots of small to mid-sized companies in the field of generics​,” and that “there’s room for a major player, and that could be Sanofi​.”

Q4 income hit by charges

Veibacher’s comments coincide with a mixed set of Q4 financials, that saw net income fell 76 per cent to $235m on charges of $1.84bn for its scrapped cancer drugs larotaxel and XRP6258 and the settlement of a patent case for its anti-allergy medication Nasacort with Barr Pharmaceuticals.

These charges aside Sanofi’s net income increased 14 per cent to around $9bn largely as a result of higher sales of its pharmaceutical and vaccines business. As a result, the firm’s share price increased $2.12, or 7.5 per cent, to $30.43 in afternoon trading.

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