Sanofi investing in biologics network despite €1.5bn cost-saving plan

By Dan Stanton

- Last updated on GMT

"Our company must become simpler," Sanofi's CEO said this morning
"Our company must become simpler," Sanofi's CEO said this morning

Related tags Pharmacology

Sanofi is assessing its network of 102 sites as part of a €1.5bn cost-saving plan but says it will continue to invest in biologics.

In a plenary session this morning to set out its 2015-2020 roadmap, Sanofi CEO Olivier Brandicourt told stakeholders it aimed to return to bottom line growth from 2018 through a reshaping of its portfolio and a cost-saving restructure aiming to save €1.5bn ($1.8bn) by 2018.

“There is no room for excess costs, our company must become simpler,”​ he said, adding the restructuring programme would commence from January 2016.

The firm has already begun assessing and reshaping its plant network,  Brandicourt  said, with so far 26 sites to some degree restructured this year. However, with 102 plants in its network Sanofi “still has one of the largest plant networks in its peer group and so will continue to reshape this.”

The French Pharma Giant recently said​ it is putting its Allegra making facility in Kansas City up for sale.

However, Sanofi will not be cutting its biologics manufacturing network as part of the restructure, Brandicourt confirmed during the call, but instead continue to invest in it to support “biopharmaceutical pipelines and growth.”

Earlier this year​, the firm increased its CAPEX to €1.9bn as a result of investments in biologics capacities and acapabilities. And two week ago, its biologics division Genzyme reported a 33% year-on-year growth in sales during the firm’s quarterly results.

Diabetes reinjection

But product sales in the firm’s diabetes business dropped 7% compared to the same quarter 2014, due mostly to a 16% drop in US sales of its leading insulin product Lantus.

During the call, the firm pledged to return this division to growth from 2019 through the development of its insulin franchise – which includes the marketed products Lantus and Toujeo and its Phase III candidate LixiLan – and through external opportunities, demonstrated by two deals struck in the past two days.

In a licensing deal, Sanofi is paying Korean pharma firm Hanmi €400 upfront but could pay up to €3.5bn in milestones and royalties for Hanmi’s insulin candidates: efpeglenatide, a late-stage long-acting glucagon-like peptide-1 receptor agonists (GLP1-RA), a weekly insulin and a fixed-dosed weekly GLP-1-RA/insulin drug combination.

And today Sanofi signed a collaboration and license deal with Texan biotech firm Lexicon Pharmaceuticals for its investigational oral inhibitor of sodium-glucose cotransporters, sotagliflozin.

Adding sotagliflozin to our portfolio, which includes medicines at virtually every stage of the treatment pathway, highlights our focus on providing a large and diverse set of therapeutic options for people with [diabetes],” ​Sanofi’s EVP Pascale Witz said in a statement.

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