Maybe it is a race to see who can save their way to prosperity first.
Sanofi announced today (Bloomberg) that it will cut 25% of its US workforce (1700 jobs) as part of a $2.8 B cost cutting initiative. The French Giant is teetering on its version of the patent cliff in the near term as 6 of its top selling products including Lovenox, Plavix, and Eloxatin will come off patent. The three accounted for over $9.2 B in annual sales in 2009. One might notice, if that drops off precipitously.
Jack Cox, a spokesman for Sanofi, said “This is beyond just the patent losses. That’s a large driver, but it’s also restructuring the overall organization to prepare for a different future for this company.” No doubt a new company that includes Genzyme as a key bedfellow - albeit a hostile acquisition. In fact, Bloomberg data says it would be the biggest hostile acquisition since Sanofi acquired Aventis in 2004 for $64 B. This mere $18-20 B transaction must look like child's play.
For its part, Genzyme sold off its genetics testing division last month to LabCorp raking in $925 M and shedding itself of 1900 employees in the deal. It also announced a job reduction plan calling for 1000 employees to be "Termeer-nated" over the next 15 months. The moves were done to save costs and to boost Genzyme's stock price - and it has done so.
So we have one Company shedding jobs to bolster its price to enable it to better position itself to take over another Company shedding jobs to bolster its price to avoid being taken over. Symmetry!
As Newton (not Isaac but his cousin Fig) might conclude in his Third Law of Takeovers, "For every action there is an equal and opposite reaction". Corollary: You may not have a job.
Posted by Bruce Lehr October 8th 2010.