Sanofi's rise
Sanofi's rise in the rankings has been achieved through a steady focus on mergers and acquisitions, which started in 1999
with an allFrench tie-up with Synthélabo in a $30-billion (€22.5billion) deal (4). Then in 2004, while Novartis was still
considering a bid for Aventis, Sanofi moved in to create Sanofi-Aventis in a $63-billion (€47billion) winning deal that the
French government supported strongly to preserve jobs in France (7).
Sanofi eventually dropped the name Aventis, thus signifying that it was the driving force within the merged company. In February
2011, Sanofi bought Genyzme with a $20.1-billion (€15.1billion) cash offer, which was seen as a shrewd move to replenish its
R&D pipeline, due to Genyzme's strong biotech focus (8). In November 2011, Sanofi announced a 26% rise in third-quarter net
profit, which included sales from newly acquired Genzyme.
The manner in which the Genzyme acquisition went ahead has been contrasted with the way in which Sanofi took over Aventis.
The Genzyme deal was very long and drawn out (taking 9 months), but Sanofi was the only company involved. It was obvious the
merger would go ahead, but there were many negotiations over price. In contrast, there was never a clear cut regarding the
winner of Aventis as the company had also been approached by Novartis (and there were rumours that GlaxoSmithKline was interested
too) (1). The deal was about politics as well as price because a lot of outside players were involved, with the critical one
being the French government. The SanofiAventis merger is often considered a messy affair because of the French government's
heavyhanded intervention; French politicians were quoted as saying that they wanted to create a "national champion" (7, 9).
In Europe, the final decision regarding mergers tends to rest with shareholders, whereas in the US, the directors have the
major say. While the US process would not feature overt involvement from the government, the Genzyme merger shows that it
can still result in a very long and drawn out process.
Like Pfizer, Sanofi has faced its own patentexpiry challenges and has been scouring the market for a source of new revenuegenerating
products. It lost a US patent challenge for its topselling blood-thinner product, Lovenox (enoxaparin), in a legal case in
2007 (1), and Sandoz, the generic arm of Novartis, has been selling a generic enoxaparin and eroding sales for Sanofi's product
since 2010. In 2010, Sanofi generated around $30.1 billion (€22.6 billion)—around 7% of its revenue—from its anti-clotting
drug Plavix (clopidogrel), which is marketed jointly with BristolMyers Squibb, but faces patent expiry in May 2012 (8). In
2006, Canadian generics manufacturer Apotex marketed a generic Plavix, but was ordered to halt production in November 2011.
Interestingly, in September 2011, Pfizer agreed to let Sanofi sell a generic version of Lipitor in France (8). This agreement
was part of a programme designed by France's Strategic Council of Health Industries, which fosters agreements between business
and government. Such deals give the original manufacturer a tax break if it allows a genericsdrug manufacturer to produce
and sell copies as the branded drug's patent expires. Specifically, the French government hopes that this will keep local
production sites open and boost employment (10).
Regarding future growth, another area Sanofi sees as important is emerging markets. In 2010, Sanofi's emergingmarket sales
rose by 16% (11). However, some have criticised the company as being too optimistic. In 2011, Sanofi admitted that it had
underperformed in Turkey due to "significant price decreases", as well as in eastern European markets because of the ongoing
economic crisis (10). Even so, the company retains faith in emerging markets, pointing out that 2010 sales increased by 47%
in China and by 19% in Brazil (11).
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