Sanofi, France’s largest drugmaker,
plans to shrink its embattled cancer business and narrow the focus within
Genzyme’s research unit as part of a wider reorganization of research and
development.
About
100 jobs will be eliminated at the company in North America, Elias Zerhouni,
head of R&D at Paris-based Sanofi, said in a phone interview. Tal Zaks, who
has led the oncology unit since last year, will leave, people with knowledge of
the matter said. Zaks, 49, declined to comment on his plans.
Sanofi
is making the changes, an acknowledgment that the cancer business didn’t meet
expectations, with Chairman Serge Weinberg at the helm following the October
ouster of Chief Executive Officer Chris Viehbacher. The company is preparing to
introduce as many as six products this year.
The
changes are “adjustments according to the fortunes or misfortunes of particular
programs,” Zerhouni said. The new CEO will inherit a company that has, over the
past five years, done a “huge amount of restructuring, everywhere around the
world, including France.”
Shares
of Sanofi climbed 14 percent since Oct. 28, the day before the CEO’s ouster,
matching the advance in the Bloomberg Europe Pharmaceutical Index.
The
drugmaker will stop operating oncology as a separate division. It will move
cancer research into global R&D operations, a person with knowledge of the
matter said, asking not to be identified as the plans aren’t yet public.
Genzyme will concentrate on rare diseases and neuro-immunology disorders, the person
said.
The
changes were to be presented today to employees.
The
drugmaker will eliminate some jobs while hiring in areas that are a priority,
Zerhouni said.
Cancer’s Weakness
The
cancer unit had been “the hope and aspiration of a renewal of the oncology
business line” when it was formed in 2009, Zerhouni said. “By 2015, our core
business has not increased. Why would you incur a huge infrastructure cost that
is inherent to a division with a business that is not strong enough to do
that?”
The
unit, based in Cambridge, Massachusetts, was created shortly after Viehbacher
took the helm. Sanofi purchased BiPar Sciences Inc. the same year, gaining
access to the experimental cancer treatment iniparib, which the former CEO
touted as important to Sanofi’s transformation. The drug failed a key trial in
2011. The introduction of Jevtana therapy in the U.S. in 2010 also
disappointed, two people said. Sanofi also lost patent protection for Taxotere
and Eloxatin.
In
oncology, the drugmaker will “step back a little bit, reinvest in R&D,
focus on things that are more promising, and just catch the next wave,”
Zerhouni said.
One
treatment with great potential is an anti-CD38 monoclonal antibody to treat
multiple myeloma that’s in mid-stage development, he said.
Oncology Acquisitions
Sanofi
will also consider acquisitions in oncology, looking well into the future,
Zerhouni said.
“There’s
nothing that’s off-limits,” he said. “I have a pretty comfortable position
because I have a pretty full late-stage portfolio all the way to 2017-2018.”
The
changes to the company, building upon alterations made by Viehbacher, have been
planned over almost nine months, Zerhouni said.
Sanofi
said in November that by 2020 it plans to introduce 18 new products that could
garner cumulative sales of 30 billion euros ($34 billion) over the first five
years. Total revenue was 33.8 billion euros last year.
The
100 jobs represent about 2 percent of Sanofi’s workforce in Massachusetts. The
drugmaker has a global total of more than 100,000 employees.
Cancer Research
Going
forward, Sanofi’s oncology research will be led by Vicky Richon, who will
report to Chief Scientific Officer Gary Nabel, one of the people said. Oncology
activities, including cancer research, will be based in Cambridge and Vitry,
near Paris.
Jevtana
and other cancer medicines will be folded into Sanofi’s global marketing
organization, led by Pascale Witz, two people said. Matthew Ros will lead the
oncology commercial operations, one of the people said.
Sanofi
purchased Genzyme Corp., the largest maker of treatments for rare genetic
diseases, in 2011. Last year, the French company accessed additional
experimental drugs for rare diseases by buying a stake in Alnylam
Pharmaceuticals Inc.
At
Genzyme, Sanofi plans to build on success with multiple sclerosis treatments
and “adjust resources so that we can do more of the rare-disease programs,”
Zerhouni said. “The Alnylam relationship is a good one and we have programs
that are entering stage three faster than I thought,” he said, referring to
late-stage drug trials.
R&D Hub
The
Sanofi-Genzyme R&D center, which was led by Richard Gregory until December,
is now overseen by Jim Burns, who is also head of Sanofi’s R&D hub in
Massachusetts, one person said.
The
drugmaker has had some high-profile departures since Viehbacher’s ouster,
including Andrew Plump, who was senior vice president for research and
translational medicine, and Paul Sekhri, who ran integrated care.
Still,
the company is retaining talent and attracting top researchers, Zerhouni said.
“People don’t leave an R&D organization when they see the portfolio that we
have,” he said.
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