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Sanofi CEO Christopher A Viehbacher on Shantha buy, future of collaborative models

Sanofi CEO Christopher A Viehbacher on Shantha buy, future of collaborative models

Christopher A Viehbacher was in Hyderabad recently for a brief visit to Shantha Biotechnics, the company he acquired in July 2009. Excerpts from an interview -

E Kumar Sharma
  • Updated Oct 6, 2011 1:48 PM IST
Sanofi CEO Christopher A Viehbacher on Shantha buy, future of collaborative modelsSanofi CEO Christopher A Viehbacher
Christopher A Viehbacher was in Hyderabad for a brief visit to Shantha Biotechnics, the company he acquired in July 2009.

He has transformed Sanofi. But then that was what Christopher A Viehbacher, a certified public accountant, was expected to do when he took over as its CEO in late 2008.  

"We were then looking at a third of our sales and half of our profits disappearing because of expiring patents, and we needed to re-position the company and find new sources of growth," says Viehbacher, 51.

Sanofi, a 30 billion euro (about $40 billion) company today, has centred its activities around six growth platforms now - emerging markets, human vaccines, diabetes solutions, consumer healthcare, innovative products and animal health.

Upbeat on the emerging markets, which is one of his focus areas, Viehbacher has been to India three times in the last three years. Acquiring Hyderabad-based vaccines maker Shantha Biotechnics was his first major deal in the region after becoming CEO.

On his third visit to India on Tuesday, he spoke to journalists in Hyderabad. Edited excerpts to questions from BT:


On Sanofi strategy on investments:
It is about achieving sustainability by investing in growth platforms that do not depend upon patents. We are not betting the whole company on being able to come up with new products constantly. While there is increased innovation in R&D, the company will continue to grow its presence in animal health, consumer health and emerging markets.

On innovation:
Big companies, and this is true not just in healthcare, do not really do much innovation. Part of the reason - at the heart of innovation is some element of disruptive thinking and some element of rupture with the way things have been done in the past and big companies do not like disruptive thinking and tend to have standard operating procedures. Look at Sony Music or even Kodak, which is on the verge of bankruptcy.

On R&D spending in pharma:
How much you spend on R&D is not necessarily predictive of how successful you will be. Plenty of companies have been very productive in R&D  but have spent only half of what some of the biggest do.

On Shantha Biotechnics and the status on Shan5 (last year, the World Health Organisation had recommended recall and destruction of all lots of Shan5, a five-in-one vaccine produced by Shantha, after the discovery of some sediments in the vaccine):
We have cracked the manufacturing difficulties and are now getting into the process to do clinical trials on Shan5 and hope to get the WHO pre-qualification soon. Last Friday (September 30) we were also very encouraged by the fact that our cholera vaccine Shanchol received WHO prequalitfication (which means it would meet the basic purchase criteria for global entities like the UN agencies and government bodies).

In Shantha, we have a low-cost, high-quality platform for vaccines that are not just for India but for the world. It also has a number of vaccines such as one for the rotavirus in its research and development pipeline that Sanofi did not have. Sanofi is in the three years 2010, 2011 and 2012, spending $300 million to make this a strong platform.

Shantha is an Indian company and we want this to be an Indian company and help it become a successful Indian company that will export around the world. We haven't Sanofised it or said you have to go the same way. Our strategy is the same in different markets and we work with the promoters of the company (we acquire) and that is why people will be willing to do an acquisition with Sanofi.

In fact, my first question to the promoter (of the company we want to acquire) is what your vision is for the company and we will help you realise that vision.

On collaborations:
I see a new model. Companies are beginning to see "we can't do all". Big pharma is good at validating technology, which is why the stock of small companies they collaborate with goes up (following any collaboration deal) as it is seen as a validation of the technology of the smaller company.

There will be more collaborative models, almost network models where you will work with academic institutions, biotech companies and others. This will not be easy because in science you have a lot of solo performers and getting them to work together is not easy (but that is the way forward).

On acquisitions:
Whether we will do more acquisitions (here in India), our objective is to have a strong growing business and whatever helps in that, is what we will look for. We don't need the glory of acquiring only to be at the top (in terms of size).

On India:
We want to continue to build our business here in India as it is going to be one of the top five markets by 2020.

On affordable medicines:
Our strategy is really to have affordable medicines because in emerging markets you do not have government reimbursement. So you have to have medicines that people can afford to pay for.

Typically, it is met by the generics but we are into branded generics, as we believe in putting Sanofi's quality. Acquisitions (done by Sanofi) like those in Brazil and Eastern Europe will help provide that range of medicines. We have not done that in India but we have a done something different here which is offer different branded generics here under the Hoechst business unit.

On pricing:
I do not want us to be a colonial company with a colonial approach where we say we decide on the strategy and pricing. If you have to compete locally then the pricing strategy cannot be decided in Paris but will have to be in the marketplace. People here will decide on the pricing strategy and we have to develop a range of products for it.

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Published on: Oct 6, 2011 1:41 PM IST
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