Back in 2011, France’s biggest Pharmaceutical company Sanofi decided to purchase Genzyme Corp. for more than $20 billion, thus becoming the latest global drug giant to acquire a big biotech to foster its R&D pipeline. 5 years later, what’s the situation for Genzyme and Sanofi?
So often when a large Pharma acquires a smaller Biotech, the result is the same. 2 or 3 years down the line the small entity tends to flop…or perhaps take a different market trajectory than planned. For example, when Merck KGaA (Germany) bought Serono in 2012, the Swiss biotech then went on firing around 10,000 people at their Geneva base…
For many people, Genzyme’s acquisition was considered as an ‘anomaly’ within the industry. This massive deal is also symbolic of the Pharma ‘shift’ into Biotech, Sanofi now being one of the most advanced biological producers, along with Roche.
Sanofi’s CEO Olivier Brandicourt said the company’s Cambridge biotech unit was one of the main drivers of growth in 2015, and once again pointed to strong growth in the company’s pipeline and in particular multiple sclerosis (MS) drugs.
As we know, the Neurodegenerative disease field (to include MS and Alzheimer’s in particular) has experienced a real revival in the industry.
Brandicourt also explained how Aubagio (Genzyme’s largest product by sales) sales shot up by 78% to become ‘the fastest growing oral MS drug in the US‘. This is quite the competition for Biogen (Genzyme’s neighbour) which still has the MS drug world bestseller (Tecfider).
In Boston, Massachusetts, Genzyme remains a driver for the leader employment in Biotech (see our Documentary), and Genzyme’s revenues for 2015 reached the $4Bn mark. On the other hand, Sanofi had also to change its internal organization. The most visible decision was to fire over 5000 people in France.
In 2016, Sanofi also launched a huge makeover of its internal organization. The business will now be divided into five units: General medicines & Emerging markets, Specialty Care, Diabetes & Cardiovascular, Sanofi Pasteur for vaccines, and Merial for animal health. And guess what, the main protagonist of this reorganization was Genzyme.
From now on, Sanofi’s biotech subsidiary will be in charge of some of the key pipelines such as rare diseases, multiple sclerosis and, significantly, oncology and immunology. The renamed Sanofi Genzyme division will be led by David Meeker and will include a pair of the company’s candidates, sarilumab and dupilumab, developed by Regeneron.
Results of the acquisition are already quite impressive. Sanofi now has 72% of its pipeline filled with biologicals and a record 100% of late-stage programs. The future is also bright as the company plans to launch a new medicine every 6 months in the next 4 years.
No doubt that the acquisition of Genzyme was a real driver for Sanofi’s transition from an old Pharmaceutical giant based on chemistry and small molecules to a modern Biotech giant. With Genzyme at the heart of Sanofi’s organization, the Boston unit of the company will stay a stronghold in the global strategy.