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Sanofi to shop for Biotech Companies

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October 01, 2009 – Comments (8)

Sanofi CEO to Shop for Biotech, Vaccine, Nonprescription Deal

Sept. 30 (Bloomberg) -- Sanofi-Aventis SA will continue “shopping” for acquisitions to build its vaccine, biotechnology, and nonprescription medicine businesses, as well as expand in emerging markets, Chief Executive Officer Chris Viehbacher said in an interview.

Sanofi has already spent 6.2 billion euros ($9 billion) this year to buy health-care companies and products as part of a strategy to bolster “five growth platforms,” Viehbacher, 49, said yesterday at the company’s New York offices. Viehbacher said Paris-based Sanofi is especially interested in expanding its vaccine operations, noting Johnson & Johnson’s purchase this week of 18 percent of Dutch vaccine company Crucell NV.

Viehbacher, who joined Sanofi from London-based GlaxoSmithKline Plc 10 months ago, is under pressure to expand as rivals merge and drugs accounting for about 20 percent of its sales face generic competition by 2013. Abbott Laboratories announced this week it will purchase of Solvay SA’s pharmaceutical unit for 4.8 billion euros. Pfizer Inc. agreed to buy Wyeth, and Merck & Co. said it will acquire Schering-Plough Corp. this year.

“There will be more shopping on the horizon,” Viehbacher said, declining to identify targets. Purchases must add to the company’s growth, Viehbacher said. He has said in the past that he is interested in acquisitions costing as much as 15 billion euros.

Vaccines are attractive because the market will double during the next five years, because the products aren’t readily reproduced by competitors and because of the investment required to build vaccine plants, Viehbacher said. Sanofi in July announced it would purchase Shantha Biotechnics, the Hyderabad, India-based maker of an experimental typhoid vaccine, and will keep looking for such acquisitions, he said.

‘Bolt-on Acquisitions’

Johnson & Johnson said it will work with Crucell to develop a universal flu vaccine. Sanofi considered buying Crucell, Viehbacher told employees on Jan. 30.

The executive continues to look for “bolt-on acquisitions” and isn’t seeking to merge with a pharmaceutical company of a size similar to Sanofi, he said.

“People thought we had to do a large-sized acquisition,” Viehbacher said during the interview. “I am not saying we wouldn’t, but it is highly unlikely.”

The company also will continue the hunt for “innovative” medicines such as the experimental breast cancer drug it acquired when it agreed to pay as much as $500 million in April for BiPar Sciences Inc., an 18-employee biotech company based in Brisbane, California, near San Francisco. The drug, called BSI- 201, attacks cancer cells in a novel way. At a science meeting in June, researchers said the medicine, when added to chemotherapy, prolonged survival in women with aggressive breast cancer by 3.5 to 9 months.

Clinical Trials

Viehbacher said the drug is being developed quickly, moving from the second of three phases of clinical trials to the third within “just eight weeks.”

“That kind of speed is just not possible within a large drugmaker,” Viehbacher said. “One of my goals is to replicate that kind of innovation and productivity in our R&D operation.”

Sanofi shares have gained 11 percent this year, giving the company a market value of 66.3 billion euros. That’s better than the 3.9 percent increase recorded in the period by the 17-stock Bloomberg Europe Pharmaceutical Index. GlaxoSmithKline has slipped 3.2 percent this year.

Sanofi’s fifth growth platform, along with vaccines, biotech, over-the-counter drugs and emerging markets, is diabetes treatments, Viehbacher said.

He reiterated he expects Sanofi’s earnings and sales in 2013 to equal their 2008 levels, excluding acquisitions. The company in July raised its forecast for 2009 growth in earnings per share to about 10 percent, assuming constant exchange rates, from the at least 7 percent previously forecast.

“Investors are beginning to look beyond 2012,” Viehbacher said. “Investors see we are one of the companies that is getting beyond its patent cliff.”   TS

8 Comments – Post Your Own

#1) On October 01, 2009 at 12:52 AM, topsecret09 (36.65) wrote:

  Calling "PORT" and other fellow fools to try to pin down some possible candidates that are ripe for takeover. Lets see If we can nail one or two for some decent pocket change...  TS

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#2) On October 01, 2009 at 5:20 AM, wcrkd (< 20) wrote:

Any chance they go after HTDS?

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#3) On October 01, 2009 at 9:57 AM, topsecret09 (36.65) wrote:

#2) On October 01, 2009 at 5:20 AM, wcrkd (< 20) wrote:

Any chance they go after HTDS?     Didn't have that one on my radar,thanks for heads up... I will take a look at that one and a few more that I think may be gobbled up a bit later In this post. I am still researching to try to narrow It down..... Hope to get some more Ideas from fools that really know this sector... TS

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#4) On October 01, 2009 at 10:54 PM, topsecret09 (36.65) wrote:

  I am suprised that fellow fools are not Interested In making money... I have spent a large part of the day researching possible (buyout candidate) Biotech companies that concentrate mainly on vaccines. Although I have come across some companies (one In particular) that looks like a buyout candidate based on nothing less than SPECTACULAR R&D INVESTMENTS.... more on that company a little later,still doing some more digging....  one company that looks like a REAL POSSIBILITY to me Is BIOMARIN (BMRN)  They have 3 products on the market,and look well positioed for success. With 100 million shares outstanding, At a current $18.00 per share their market cap Is only 1.8 Billion. Sanofi could offer  $40.00 and get quite a prize In my opinion spending just 4 Billion for the acquisition.... Anybody else ??   TS 

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#5) On October 01, 2009 at 11:27 PM, topsecret09 (36.65) wrote:

  #2) On October 01, 2009 at 5:20 AM, wcrkd (< 20) wrote:

Any chance they go after HTDS?    No,that would not happen In this case...  this company Is highly questionable "pennystock" ..... TS

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#6) On October 02, 2009 at 12:29 AM, topsecret09 (36.65) wrote:

  Biomarin's next year earnings growth Is projected at 430%. Its 5 year projection Is 31% anually !!  The average 5 year growth In the Industry Is only 6 1/2 % !!!  ALL IN ??   TS

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#7) On October 02, 2009 at 12:55 AM, portefeuille (99.61) wrote:

There are quite a few biotech/pharma calls here.

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#8) On October 02, 2009 at 1:09 AM, TMFUltraLong (99.95) wrote:

I wouldn't be shocked to see Sanofi-Aventis make a move for Enzon Pharmaceuticals (ENZN)...ive been wondering why they havent hooked up for a few years now.

UltraLong

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