2012: A Good, Bad or Ugly Year for Servier?

The scandal surrounding Servier's diabetes drug, Mediator, continues to unravel in France and could have implications for the whole pharmaceutical industry as the country scrutinises its regulatory systems.
Feb 01, 2012
Volume 24, Issue 2

Nathan Jessop
However 2012 ends up, it will be a dramatic year for Servier. The French company has a number of ongoing collaborations that could lead to a new generation of products, but any positive news from these developments is likely to be overshadowed by the ongoing safety scandal of its diabetes treatment Mediator (benfluorex hydrochloride), which was withdrawn from the market in 2009. A major court case is set for mid-year and the controversy continues to implicate an ever-growing list of prominent people in France. The scandal receives regular coverage in the French media, some of which has drawn an angry response from Servier's legal team (1). It is also worrying for the pharmaceutical industry as a whole because the developments are prompting changes in the way that drugs are approved in France (2).

A unique company

Servier has always prided itself as being different to other pharmaceutical companies (3). Although it is among the top 10 companies in Europe and ranks among the top 30 worldwide, it remains an independent company. In 2004, Servier's ownership structure was changed to a foundation to prevent takeovers. According to the company's founder, Jacques Servier, this is the best way to enable continuity for the company's mission.

Its publicly available information highlights the difference between itself and other companies and this has been emphasised by its founder in his rare interviews (4, 5). For example, Servier states that it reinvests a higher proportion of its turnover back into its research. Whereas the top ten pharmaceutical companies reinvest 14% of turnover, and French industry as a whole reinvests 9%, Servier reinvests 25% (3). Servier refers to this as the "invent or die" principle, citing the fact that it has synthesised 50 000 chemical entities as evidence of its innovation credentials.

Another aspect of the company's independent approach has been its internationalisation strategy. It is now present in 140 countries and 90% of its medicines are used internationally. This success stems from adopting a global strategy early on. For example, the company established itself in eastern Europe before the fall of the Berlin wall, which meant that it was well positioned in the aftermath. In 1998, a major economic crisis hit Russia and prompted a number of US companies to withdraw from the market, but Servier chose to stay and has since benefited from the market resurgence.

At present, the company is banking on a number of collaborations bearing fruit in the near future to continue its strong growth. In January 2012, Servier announced a deal with the Swedish company BioInvent International under which Servier will use BioInvent's technology to select an antibody candidate for the development of an unspecified oncology target (5). At the end of 2011, Servier also entered into an agreement with MacroGenics, a US biotech company, for the development and commercialisation of MGA271, a first-in-class monoclonal antibody candidate that is being studied in Phase I for the treatment of solid tumours. The deal is potentially worth $470 million (5, 6). Servier also has an ongoing alliance with Belgian biotech firm Galapagos to develop a novel osteoarthritis drug, which led to a milestone payment of €4 million from Servier in December 2011 (7).

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