• Venture had sales of about $330 million in first half of 2015
  • European venture sells flu, shingles, cervical cancer shots

Sanofi and Merck & Co. are considering ending a two-decade-long joint venture to sell vaccines in Europe, as revenue from the products declines and Sanofi Chief Executive Officer Olivier Brandicourt reorganizes the French drugmaker’s operations, according to people familiar with the situation.

Brandicourt is reviewing the alliance because of a lack of promising assets in the business’s pipeline, said the people, who asked not to be identified because the deliberations are private. Unraveling the venture, in which Merck and Sanofi each hold half, would be complex and may hit snags along the way, one person said.

The joint venture, known as Sanofi Pasteur MSD, had revenue of about $330 million in the first six months of last year. It supplies almost half of Europe’s flu vaccines, as well as shots against shingles and the cervical cancer vaccine Gardasil, in Europe. Sales have grown in only one of the past seven quarters.

The division is based in Lyon, a stone’s throw from Sanofi’s own vaccine business, called Sanofi Pasteur. That unit is starting to roll out the world’s first vaccine against dengue fever and is working on other life-threatening diseases such as clostridium difficile. Merck also has its own vaccines division, which is developing a shot against Ebola.

Spokesmen for Paris-based Sanofi and Kenilworth, New Jersey-based Merck declined to comment and a representative for Sanofi Pasteur MSD didn’t immediately return a call seeking comment.

Shares of Sanofi fell 0.6 percent to 76.32 euros as of 9:11 a.m. in Paris trading. The stock has dropped about 7 percent over the past 12 months, in line with a drop in the Bloomberg Europe Pharmaceutical Index.

Brandicourt, who became CEO in April, is reshaping Sanofi’s portfolio, a complex legacy after two transformative mergers, to focus on fast-growing areas including diabetes, rare diseases and emerging markets.

The company, which faces declining sales of its best-selling product, said in December it was in exclusive talks to trade its Merial animal health business with Boehringer Ingelheim GmbH’s consumer-health operations. More businesses are under review, including the European generics operations.

Sanofi is scheduled to report 2015 earnings on Feb. 9.

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