Sanofi's Shock Therapy Enrages the French
Among the major French companies that have triggered protests at home this summer by announcing job cuts, Sanofi 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.