Sanofi’s Viehbacher spotlights Big Pharma’s new role creating biotechs

Posted under Blog, Christopher Viehbacher, Companies, Diagnostics, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Sanofi, Startups, Universities, Videos by John Carroll

One of Chris Viehbacher's favorite themes since he's taken the helm at Sanofi is the woefully low level of R&D productivity in the business and how that has to change. So it's no surprise that when Forbes magazine recently highlighted the fact that new drugs at some pharma companies could cost as much as $8 billion to $12 billion each, on average, he seized on the numbers and used them to illustrate the industry's dilemma in a speech yesterday in North Carolina. And he highlighted Sanofi's recent decision to join forces with a prominent Boston VC group on a $125 million company launch as a new business model that can work for everyone in biotech.

Biopharma R&D in the U.S., said Viehbacher at the CED Life Science Conference in Raleigh, rings up at a cost of $100 billion a year and delivers 20 to 30 new medicines annually. "On average," he told the crowd, "studies have shown that if you spend a dollar on research and development it will return 70 cents."

Meanwhile, he says, biotech executives routinely come to him about a dire lack of venture funding. "I am approached by companies with Phase II assets, and there's no funding for Phase III." Combine those two trends, and something has to give. In Sanofi's case, where the focus in R&D has shifted from in-house work to an "open environment" where researchers are charged with collaborating with investigators outside the company, the trend pushed Viehbacher not to just partner with a biotech company, but to actually join hands with Third Rock Ventures to launch a new company.

"We created not only a company, but a process for Third Rock," said the CEO, referring to Warp Drive Bio. "Third Rock had the capability and funding, we brought a library of compounds." That deal helps put Sanofi in the center of a hub of scientific activity in Boston, accelerates discovery work and helps back the venture side of the business.

"Every VC is interested in an exit," he told the audience. "If you partner with Big Pharma, there is that."

And while it still may be risky, a company the size of Sanofi can always move on.

Said Viehbacher: "This thing can sunset if it doesn't work and we can put our money elsewhere."

Special Report: Christopher Viehbacher - The 25 most influential people in biopharma today

Christopher Viehbacher – The 25 most influential people in biopharma today

Posted under Blog, Cancer, Christopher Viehbacher, Companies, Diabetes, Diagnostics, Funding, Genzyme, Medical Devices, Medical Supply, Multaq, Pharmaceuticals, PhRMA, Sanofi, Startups, Universities, Videos by Ryan McBride

Out to eliminate the patent cliff

Christopher Viehbacher
CEO
Sanofi

Few people seem to harbor as much contempt for the dire impact of patent cliffs on the biopharma industry as Christopher Viehbacher, who has been a man on a mission since he took the reins at Paris-based Sanofi ($SNY) in late 2008 to ensure that the drugmaker never has to endure another patent cliff.

Viehbacher not only sits at the helm of the world's second-largest pharma, he also advocates for drugmakers of all stripes as chairman of PhRMA, using his position to advocate for changes at the FDA and elsewhere that could ease some of the well-known regulatory and risk-related pains the industry.

Viehbacher has made a series of deft maneuvers as part of a strategy to balance Sanofi's revenue stream and move away from the flawed pharma business model of generating a majority of income from a select number of blockbuster drugs. Most notably, he led a charge that took months to acquire Cambridge, MA-based biotech powerhouse Genzyme for $20.1 billion in April, a move that gave Sanofi scale that it had lacked in the biologics business and a leadership post in the market for rare disease treatments.

Yet, more than just beefing up biologics, Viehbacher's strategy for building a sustainable pharma business has also emphasized growth in emerging markets, vaccines, consumer and animal health products, as well as focused development of drugs for diabetes and cancer. With more legs on the revenue stool, Sanofi reduces its risk of falling if one leg gets taken out by, say, an invasion of generic competition to big-selling therapies. And Sanofi faces plenty of patent cliff woes. For instance, the company loses U.S. patent protection on blockbuster blood thinner Plavix and the blood pressure pill Avapro this year, The Associated Press reported.

"Above all, what I'm looking for is businesses that are not dependent on patents," Viehbacher said in an interview with the AP last year. "This is my fourth patent cliff in my career and I'm looking to avoid a fifth."

To keep the company's pipeline of new drugs stocked without breaking the bank, Viehbacher has steered Sanofi's R&D ship to get more of its products from external collaborators, in an open R&D framework, than in the past. An accountant by training, he understands the financial drain of an unproductive internal R&D group on his organization, and Sanofi can avoid the fixed costs of staff scientists via incentive-laden deals with drug development partners.

Yet Sanofi has suffered a series of stumbles in the clinic and heart drug Multaq has been a colossal disappointment, and all the strategizing in the world won't make up for a lack of new drug approvals to fuel growth at the company.