Sanofi Aventis Outlines Growth Strategy

Paris (Feb. 11)-Sanofi Aventis CEO Chris Viehbacher provided the company’s growth strategy in light of changing conditions facing the pharmaceutical industry, which include patent expirations and declining research and development (R&D) productivity. The company’s new focus emphasizes product and geographic diversity.

The company’s transformation program involves three key strategies: increase innovation in R&D; adapt the company to future challenges; and pursue external growth opportunities. The company says that it has already begun to roll out some initiatives to meet these goals and expects them to be implemented by the summer of 2009.

Sanofi Aventis says it is evaluating its current resource allocation in R&D, a process that will be ongoing in the first half of 2009, according to a company press release. This process involves rationalization of its product portfolio, creating more flexibility in R&D by allocating resources to external collaborations, and redefining its decision-making process. As part of that effort, the company created two new positions: chief medical officer, who will monitor the balance between risk and benefit for marketed products and products under development, and scientific advisor, who will contribute to the R&D decision-making process for the company’s portfolio and strategy, particularly in the creation of partnerships.

Without providing details, Sanofi Aventis also said that it will align its industrial capacity in line with future changes in volumes and analysis of growth opportunities. This process will involve simplifying its organizational structure and operational processes to reduce general and administrative costs. And the company will continue to explore external collaborations and explore ways to reinforce its regional approach.

“Our ambition is to become a diversified global leader in healthcare, with one of the most productive R&D [groups] in the sector,” said Viehbacher in a company release. “Our objective is to deliver EPS [earnings per share] growth ahead of current expectations of financial markets, while strengthening or building platforms for growth for 2012 and beyond.”

Sanofi Aventis posted pharmaceutical sales of EUR 24.7 billion ($30.9 billion) in 2008, a 3.1% gain compared with 2007.