- Associated Press - Friday, October 28, 2011

NEW YORK (AP) - When France’s top drugmaker lured Christopher Viehbacher away from a British rival in late 2008, the hope was he would be a savior.

The company, Sanofi SA, faced several daunting challenges, including repeated research failures and a deluge of generic competition starting to wipe out billions in annual revenue.

His predecessor had been replaced after less than two years, after failing to satisfy investors and the scuttling of a heralded obesity drug, Acomplia. The drug was pulled off the market in Europe and never got U.S. approval because of links to depression and suicidal thoughts.

Viehbacher had gained broad experience over two decades with Glaxo in Europe, the U.S. and Canada, including running its U.S. business for five years. His understanding of regulators, investors and the market in the U.S., where Sanofi needed to boost sales, made him particularly appealing. And while he was born in Canada to German parents, he was fluent in French.

Today, nearly 3 years after being tapped to shake things up at Sanofi, Viehbacher, 51, can take credit for reorganizing the company, divesting into growth areas and making enough smart deals that last month he promised investors 5 percent annual revenue growth for the next four years.

That tops the outlook for many rivals. Some will see their revenue decline over that stretch, as patents expire on drugs with billions in annual sales and patients switch to cheaper generic versions.

Sanofi, which reports its third-quarter results Nov. 3, has been hurt by a succession of its drugs getting generic competition over the past couple years. Sales fell for 13 of its 19 top drugs in the first half of the year, including blockbuster bloodthinner Plavix, blood pressure pill Avapro, insomnia treatment Ambien and Lovenox for preventing blood clots. Sales of Plavix and Avapro will fall further next year, when their U.S. patents expire.

Viehbacher has maneuvered to avoid another “patent cliff.” He’s shifted Sanofi’s focus from blockbuster patented drugs to six growth “platforms” _ areas with products with indefinite lifespans, not the typical 10 years before prescription pills get generic competition.

Those areas are vaccines, consumer health products, medicines for pets and livestock, diabetes treatments and testing supplies, biologic drugs for rare or complex disorders, and products for emerging markets _ China, India, Brazil and other countries where a growing middle class is buying more medicine.

Some promising biologic drugs came with Sanofi’s biggest deal under Viehbacher, the $20.1 billion purchase of Massachusetts biotech company Genzyme Corp., in April. Sanofi tapped into the U.S. consumer product market in 2010 by buying Chattem Inc., which sells nonprescription Allegra allergy pills, Gold Bond moisturizer and Unisom sleeping pills.

On top of the Genzyme deal, Sanofi has been spending 1 billion to 2 billion euros a year (about $1.4 billion to $2.7 billion) on small and midsize acquisitions that fit into existing businesses. And it’s a leader in emerging markets.

Viehbacher restructured Sanofi’s research organization to start more outside partnerships and focus on products with major commercial potential. In 2009 alone, the company scrapped 30 research projects, because the experimental drugs didn’t work well, had bad side effects or weren’t seen as big sellers.

Despite that, Sanofi will apply for approval of six drugs in nine months through next March, including two for multiple sclerosis and drugs for colon cancer, clot prevention, type 2 diabetes and extremely high cholesterol.

Like its rivals, Sanofi has been cutting sales and research jobs and trimming other costs. It’s lopped off nearly 2 billion euros in annual spending under Viehbacher, and he just announced plans to cut another 2 billion euros by 2015. That’s needed to adjust to the hits from generic competition, European government health programs reducing what they’ll pay for drugs and declining success in the lab.

Viehbacher visited The Associated Press in New York recently to discuss his plans and his view of the industry.

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