We're Not the Beast You Thought We Were....

"When people think about Sanofi Aventis, they think about Plavix and about Acomplia. Plavix is going away, and Acomplia never came."

That just about sums up Sanofi Aventis' quandary. And it came not from disgruntled investors but from the group's new CEO, Chris Viehbacher, during the company's full-year results presentation in Paris today. (Which, in a sign of the company's new world-friendly face, was held at 2pm CET, not early morning when the US is asleep.)

Okay, so he was trying to dispel various myths about Sanofi Aventis--including, one gathers, those he himself entertained before joining ten weeks ago (he missed out on the top-job at GlaxoSmithKline).

He went on to say: "But there's a lot more."

The 'more' is: Sanofi's vaccines business, ranked number one (if you include Sanofi Pasteur MSD, a joint venture with Merck), a foothold in generics (read: Zentiva), the most geographically-spread business in the sector (spread about a third each across the US, Europe and RoW; Sanofi claims to be #1 in sales terms in BRIC and Mexico) and a bit of OTC. All of the starting points, in other words, to create a 'diversified health care business'.

Heard that goal before? It was Kindler at Pfizer a couple of weeks ago, justifying spending $68 billion on Wyeth. We don't need to do that, Viehbacher argued; indeed, "Pfizer had to buy Wyeth just to get where we are--a major player in vaccines, with biologics and OTC."

Okay, so maybe he had a point in dispelling what he saw as another myth: that Sanofi Aventis has missed the biologicals boat. "30% of our sales come from biologicals," he told the audience, referring to once-daily insulin Lantus, low molecular weight heparin Lovenox (whose generic exposure is a particular uncertainty for the business) and vaccines. Not necessarily your anti-TNFs or anything like that (and it's not as if Sanofi has been at the forefront of buying new technologies like RNAi either) but large molecules nevertheless.

But Viehbacher wasn't trying to pretend that Sanofi-Aventis is ok, really. It isn't; the company's three years from a patent cliff and doesn't have enough new products. That's why he kept talking about transformation and getting back to growth. And one myth he didn't try to dispel was that Sanofi-Aventis has been inward-looking. "We have not looked outside of our walls enough," he acknowledged. That's about to change (though it won't be mega-mergers): €4 billion in annual cash flow and virtually no debt to finance will help.

We thought Viehbacher did a good job of setting out what he has to work with, and what he wants to do. Here are some other messages that came through (to us, at least) from the flurry of PR and appointments launched concurrently:

1. We’ve learnt from our mistakes.....(that means Acomplia)
2. ... thus our regulatory person is now our CMO (so we won’t get stuck at the authorities again, no way)
3. ... and we keep repeating that "patient safety is of the utmost importance to Sanofi Aventis," just in case you still remember how we tried to foist a CNS-meddling drug on you to help you lose weight (that means Acomplia)
4. To push home that point a bit more still, we've created a Benefit/Risk Assessment Committee which our new CMO will chair
5. Our CFO is becoming our chief strategy officer (CSO) so the future is about spending MONEY on DEALS (but no, we don't plan to buy Regeneron as that would spoil the bloom)
6. We've hired a top-notch scientific advisor in Dr Elias Zerhouni (lauded in the New York Times yesterday) to help us assess what platform technologies and partners we need, tell us how well we're doing (or not), and keep our feet on the ground. (We weren't great at that before.)
7. He'll also help us sort out R&D. (And we'll give our ex-employer a dig by saying the jury's still out on the CEDD structure.)