According to Seeking Alpha, Chris Viehbacher, CEO of Sanofi-Aventis and Chairman of PhRMA, is stickng to a familiar theme -- that is remaking the pharma model by de-emphasizing in-house R&D. He says the industry has failed to get an adequate return on its investment in R&D and therefore needs to tap the greater world of ideas by externalizing R&D.
"My goal as CEO is never to inaugurate a new research and development center," said Viehbacher.
Instead, Sanofi has outsourced up to $2.2 billion in R&D with Covance over the next 10-years - and cut translational research agreements with Harvard University and The Charite University in Berlin.
This thinking must be catching on. Readers here will note a post from Matthew Herper's blog yesterday that recounts a loss of nearly 300,000 pharma jobs in the last decade - with more than half of that in the past 3 years.
The LIfe Sci VC blog carried a post yesterday about the rise of CROs -- and how companies like BMS, Takeda, Sanofi, Lilly, GSK etc have inked deals in the past couple of years to outsource large chunks of R&D work to CRO partners.
The author, Bruce Booth, goes on to predict "that more and more virtual or semi-virtual biotechs will be funded that require less infrastructure and focus increasingly on an asset-centric model of innovation and less on platform-centric capacity building. These startup biotechs are only able to "go virtual" by leveraging the emerging breadth, expertise, diversity and cost consciousness of the global CRO industry."
It looks like less Big Pharma R&D is on our horizon to stay.
Posted by Bruce Lehr April 15th 2011.
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