Sanofi May Seek Acquisitions In Food, Nutrition to Fuel Boost
Europes third-largest drugmaker may seek profit in grocery stores as well as doctors offices because “good nutrition can help prevent many diseases,” Chairman Jean-Francois Dehecq said in an interview at Rungis, near Paris, yesterday after speaking on a panel about the links between nutrition and health.
Sanofi is looking at food — ranging from nutrients that bolster childrens immunity against flu to meals designed for cancer patients — after sales fell for four out of five quarters, regulators rejected its most promising medicine and at least four of its biggest rivals decided to join forces.
“The changes taking place in the pharmaceutical industry over the past months have created two or three giants that have changed the playing field,” Dehecq said. That means Sanofi, which has 4 billion euros ($5.4 billion) in annual cash flow to spend on acquisitions, is also “doomed to grow.”
Pfizer Inc. in January said it would buy Wyeth for $68 billion. Merck & Co. this month agreed to buy Schering-Plough Corp. for $41.1 billion.
The question for Sanofi is which course to pursue now, according to its chairman. The Paris-based drugmaker, known for its Plavix blood-thinning drug, hired Chris Viehbacher from GlaxoSmithKline Plc to chart a new course as chief executive.
36 Solutions
Viehbacher, who joined Sanofi at the start of December, said in a March 12 interview he is redefining the companys strategy, moving away from the search for blockbuster drugs. Instead, he favors smaller acquisitions and partnerships with researchers that will give Sanofi access to innovative science.
“To grow bigger there are maybe 36 solutions, and these are all solutions Chris will be studying, and that we will be studying with him,” Dehecq said.
Dehecq, 69, who created one of Sanofis predecessor companies more than 30 years ago, said if the drugmaker decides to develop health foods and nutritional supplements, it will be going back to a strategy he tried and failed to implement several decades ago.
“It was too early,” he said. “We made reduced- cholesterol butter and gruyere cheese, and nobody was interested. At the end of my career, I see” the plan made sense.
Dehecq said he believes Sanofi could try to be a meeting point between pharmaceutical knowledge and nutritional expertise.
Danone, also based in Paris, has shed foods like cookies to focus on water and healthier products, buying Dutch baby-food maker Royal Numico NV.
Sanofi also may expand in animal health and nutrition, Dehecq said. Viehbacher, in the March interview, said Sanofi may buy Mercks stake in Merial, the worlds third-biggest animal- health company and a joint venture between the French and U.S. drugmakers. Merck will sell its half of Merial after agreeing to buy Schering-Plough, according to people familiar with the situation.