Sanofi Said to Plan Move Out of Paris Headquarters to Cut Costsby
Company said to discuss leaving rented site on rue La Boetie
Legal setback on cholesterol drug adds to pressure on expenses
Sanofi, France’s biggest drugmaker, is discussing a move out of its headquarters in central Paris as part of Chief Executive Officer Olivier Brandicourt’s push to save money, according to people familiar with the situation.
The company probably will move its headquarters to Gentilly, a town south of Paris where it already has offices, said the people, who asked not to be identified as the plans aren’t public. A transfer would help save several million euros, one person said. Sanofi has about 700 workers at its headquarters. A Sanofi spokesman declined to comment.
Brandicourt, who joined Sanofi a year ago, pledged in November to slash costs by 1.5 billion euros ($1.7 billion) to help sustain earnings growth through 2020 as sales of its best-selling Lantus insulin slump because of pricing pressures in the U.S. and competition in Europe. Sanofi also faced a legal setback this week with one of its most promising new treatments, the cholesterol-reducing therapy Praluent.
Sanofi moved into the rented Belle Epoque building at 54 rue La Boetie, in the eighth arrondissement of Paris near the Champs Elysees, in 2012 after a costly revamp of the site, which previously was the headquarters of Alcatel-Lucent SA. Before that the company was based in the southeastern corner of Paris.
Sanofi is eliminating management layers, simplifying operations and cutting positions in France and abroad to rein in expenses. Top management is seeking other options to save costs and moving out of the current headquarters would be one way, one of the people said.
Sanofi and partner Regeneron Pharmaceuticals Inc. this week lost to Amgen Inc. in an intellectual property battle over their competing cholesterol drugs. Sanofi and Regeneron could be liable for royalties to Amgen, meaning it could take longer than expected for Praluent to reach blockbuster status, according to some analysts. Praluent is one of six new products the French drugmaker is counting on to revive sales.