Sanofi CEO Chris Viehbacher took the opportunity this week to further explain his strategy for the company in the coming years and specifically his approach to mergers and acquisitions. He reiterated his desire to find companies in the $5 B to $20 B range and to avoid mega-mergers of the type recently pursued by Pfizer and Merck.
He indicated a desire to find targets where Sanofi could add value to an acquired company that they would not possess - e.g. marketing, regulatory expertise or capital. Genzyme is viewed as a potential acquisition whereby Sanofi coudl help with their manufacturing problems experienced over the past two years.
Ideally, Sanofi would like to acquire companies that did NOT depend on patents for their value/products value. He stated that he had seen 4 patent cliffs in his career and wished to avoid a 5th. Sanofi will be looking at consumer (OTC) markets, emerging markets (rare diseases, China, etc) and generics as all of these are less susceptible to patent issues.
The trick is to find value. An acquired company should add earnings, costs savings and sales growth in order to contribute to higher share prices for investors. See Fierce Biotech and the Forbes blog.
Posted by Bruce Lehr August 3rd 2010.