David's New Book

Tuesday, November 4, 2014

Viehbacher, Sanofi and Antibiotics



Sanofi CEO Chris Viehbacher was just fired by the Sanofi Board.  Viebacher was previously head of the US business for GSK.  When Andrew Witty was appointed as CEO at GSK, Viebacher jumped ship for Sanofi.  But he apparently brought with him Witty’s and GSK’s passion for antibiotic R&D.

The story of antibiotics at Sanofi is a very mixed one.  At the time of the Sanofi merger with Aventis, Aventis was in the midst of spinning off its entire antibiotic research unit in Paris.  Sanofi, then under the direction of Jean-Francois Dehecq, and after much debate, completed the spin-off to form Novexel in December, 2004.  Novexel was purchased by AstraZeneca in 2009 in a complicated deal with support from and obligations to Forest (now Actavis). Hence, all those Sanofi assets, some after considerable development at Novexel, went to AstraZeneca and Forest.   One of those assets was the compound now called avibactam, which has just completed its phase III trials in intra-abdominal infection and should be approved next year.

Enter Viehbacher 2008.  He quickly decides that exiting antibiotic R&D was a big mistake and he tries to restart the group at Sanofi’s research site in Toulouse, France.  Under his new R&D head, Elias Zerhouni, (an academic researcher who headed the NIH in the US for a number of years under George W. Bush) they hire a new head of anti-infectives research.

Around the same time, with pressure from patent losses, Viehbacher and Sanofi developed a grand plan to reduce costs and increase research productivity by closing research sites in France and moving more research to their new Boston site at their newly acquired Genzyme affiliate. But this led to protests from everyone in France from the government on down to Sanofi employees threatened with job losses.  As a result of this political pressure, their plan went from something like 2500 jobs cut to 800 and counting. Having worked as an executive in France (but based in the US) – I can only empathize with Sanofi management.  France is not a very business-friendly place and necessary strategic restructuring is challenging in the best of times. Part of this plan involved closing their research site at Toulouse where the nascent anti-infectives research group is located.  Within less than two years their new head of anti-infectives resigned. The group was left in better shape in terms of their understanding of anti-infective R&D but worrying about their future either in Toulouse or possibly in Lyon.  The departure of Viehbacher can only add to their anxiety.

Since 2008, anti-infectives research in Toulouse has produced no projects in late stage development. While this is not surprising given that they had to restart essentially from nothing and given the turmoil of the last six years, it remains disappointing.  Perhaps their most important foray in external collaborations was their agreement with Rib-X (now Melinta) in 2011 for novel antibiotics targeting the ribosomes of Gram-negative superbugs. But this apparently led nowhere and the collaboration was dissolved in 2013.

With the departure of Viehbacher, the Sanofi board has apparently already approached Pascal Soriot, the current CEO of AstraZeneca – who wants out of the antibiotic R&D business.  Luckily (as far as I am concerned), he was not interested in Sanofi.  And there, who can blame him given the travails of running a business in France? My big question is – what will happen to antibiotic R&D in the next version of Sanofi?  Will they regroup and make progress or will they join the legions of other companies abandoning the area?  As always, we await further developments.