Sanofi-aventis Pharmaceutical Company SWOT Analysis Report
Summary
- Sanofi-aventis was the second largest company in the BRIC market, with sales of $2bn in 2009 equal to a market share of 3.4%.
- With 2009 sales of $786m in Brazil this was the company’s largest market among the BRIC countries accounting for 39.9% of its sales. Russia was its next largest market with sales of $541m in 2009 at a year-on-year decline of 1.3%.
- Drugs for the alimentary tract and metabolism and the blood forming agents were the two largest drug classes for Sanofi-aventis with sales of $551m and $277m in 2009, providing 28% and 14.1% of the company’s BRIC sales respectively.
- Plavix belonging to the blood forming drug class and Lantus, the anti-diabetic drug were the leading brands for Sanofi-aventis in BRIC with sales of $185m and $137m respectively. They reported a year-on-year growth of 23.2% and 21.3% respectively.
- Sanofi-aventis acquired Shantha Biotechnics in India and Medley in Brazil in order to strengthen its position in the BRIC markets.
Company overview
The
merger of Sanofi-Synthelabo with Aventis created Sanofi-aventis in 2004.
Headquartered in Paris, France, Sanofi-aventis’ healthcare business is
segmented into prescription medicines, vaccines, generics, consumer healthcare
and animal products. The company’s prescription medicines are primarily
concentrated in therapeutic areas including cancer, thrombosis, cardiovascular
disorders, CNS, diabetes and internal medicine. Sanofi Pasteur a division of
Sanofi-aventis manages the vaccine business of the company. Table
22 gives an overview of Sanofi-aventis.
Table 22: Overview of Sanofi-aventis
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Headquarters
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France
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Global sales
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$35.5bn
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BRIC sales
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$2bn
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Market share (% of total global sales in BRIC)
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5.5
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Major therapeutic focus
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Alimentary tract & metabolism
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Source: IMS Health, copyright ©, reprinted with permission
Therapeutic focus
Alimentary
tract and metabolism was the largest drug class in the BRIC markets for
Sanofi-aventis with sales of $551m in 2009 equal to 28% of the company’s sales.
Lantus, an anti-diabetic drug was the top selling brand for Sanofi-aventis in
the category accruing sales of $137m with 21.3% year-on-year growth. The blood
forming agents generated sales of $227m in 2009 with a robust 20% year-on-year
growth. Brands including Plavix and Lovenox accounted for 92.3% of the drug
class’s sales in 2009. Figure
2 illustrates the performance of Sanofi-aventis’ leading therapeutic segments
in the BRIC region during 2008-09.
Geographic focus
Brazil
was Sanofi-aventis’ largest market among the BRIC countries. It generated sales
of $786m in Brazil in 2009, forming 39.9% of the company’s sales share from the
BRIC countries. The musculoskeletal drug class was the company’s leading
therapeutic category in Brazil with Dorflex being the top selling brand. Russia
accounted for $541m of the company’s sales in 2009. Due to the economic
downturn and unfavorable currency exchanges, Sanofi-aventis’ Russian sales
declined by 1.3% decline in US$ even though it indicated 24.8% year-on-year
increase in sales in 2009 in the Russian currency Ruble. Sanofi-aventis had
robust 29.9% year-on-year growth to generate sales of $461m in China in 2009. Table
23 illustrates Sanofi-aventis’ sales performance in the BRIC markets in
2009.
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Table 23: Sanofi-aventis’ sales distribution across BRIC
countries, 2009
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Country
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Sales 2009 ($m)
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Sales growth, 2008-09 (%)
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Sales share, 2009 (%)
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CAGR, 2005-09 (%)
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Brazil
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786
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1.4
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39.9
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14.6
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Russia
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541
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-1.3
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27.5
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10.0
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China
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461
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29.9
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23.5
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38.7
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India
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179
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3.1
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9.1
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10.9
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Total
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1,967
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6.2
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100.0
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16.5
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Source: IMS Health, copyright ©, reprinted with permission
Marketed focus
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Table 24: Leading brands of Sanofi-aventis in the BRIC market,
2009
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Brands
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Sales 2009 ($m)
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Sales growth, 2008-09 (%)
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Sales share, 2009 (%)
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CAGR, 2005-09 (%)
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Plavix
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185
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23.2
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9.4
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36.0
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Lantus
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137
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21.3
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7.0
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45.2
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Dorflex
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113
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-0.5
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5.8
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19.2
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Essentiale
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93
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1.6
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4.7
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13.2
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Lovenox
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71
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16.1
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3.6
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25.4
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Taxotere
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55
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21.3
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2.8
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29.5
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Novalgin
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52
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-1.8
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2.6
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6.8
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Eloxatine
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52
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20.0
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2.6
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17.4
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Depakine
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50
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19.0
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2.5
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8.7
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Halothyrone
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48
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6.1
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2.4
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23.2
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Top 10
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855
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12.9
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43.5
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23.4
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Others
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1,112
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1.6
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56.5
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12.3
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Total
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1,967
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6.2
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100.0
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16.5
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Source: IMS Health, copyright ©, reprinted with permission
R&D
Sanofi-aventis
spent around $6.4bn on R&D in 2009. In the same year, the company entered
into 18 R&D partnership and licensing arrangements. Biologic products and
vaccines form 60% of the company’s R&D portfolio. Currently, the company
has 49 products in clinical development with 17 of them being either in Phase
III studies or under authorization.
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Table 25: Sanofi-aventis’ late stage R&D pipeline
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Molecule
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Indication
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Aflibercept
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First line treatment for mProstate
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Alvocidib
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Chronic lymphocytic leukemia
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Otamixaban
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Acute coronary syndrome
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Teriflunomide
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Multiple sclerosis
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Menactra
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Meningococcal disease
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Flu ID
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Seasonal influenza vaccine
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Source: Company reports
Growth drivers
Sanofi-aventis
aims to tap the less developed rural healthcare market in India through its
branded generics. The company has initiated a rural program called “Prayas”
through which it aims to promote patient education with improved healthcare
quality. Sanofi-aventis’ subsidiary Hoechst will market the branded generics in
the remote villages of the country thereby strengthening its brand image.
Sanofi-aventis
has teamed up with Minsheng Pharmaceutical group in China to form a new
healthcare joint venture. The joint venture will focus on vitamins and mineral
supplements, which is among the largest healthcare consumer segments in China.
Minsheng with its established presence in the market and its flagship brand 21
Super-vita will anchor Sanofi-aventis’ efforts to expand in China.
Sanofi-aventis
has announced the relocation of its manufacturing plant from Hangzhou to
Binjiang. With an investment of $43.4m, the new plant will be GMP (Good
Manufacturing Practice) and HSE (Health, Safety and Environment Standard)
compliant. Scheduled to be completed by 2012, the new plant will be positioned
to meet drug demand in the Chinese market.
Mergers and acquisitions
Sanofi-aventis
has expanded its generic business through the acquisition of various regional
generic companies. Sanofi-aventis hopes to improve its position compared to
generic competitors including Teva and Sandoz. The French drug major
strengthened its position in the Brazilian market through the acquisition of
local generic company Medley in 2009. Medley has a wide range of 127 generic
and a few branded products marketed in Brazil. In the Latin American region,
the company also acquired Mexican generic maker Kendrick in the same year.
Sanofi
Pasteur recently acquired Merieux Alliances’ French subsidiary ShanH which has
a majority stake in India based Shantha Biotechnics for $770m. With the
acquisition, Sanofi-aventis plans to manufacture vaccines at Shantha
Biotechnics’ plant to satisfy demand for quality affordable vaccines
internationally. Sanofi Pasteur also gains access to Shantha Biotechnics’
vaccines portfolio including Shanvac-B, Shantetra, Shan5 and Shantt among
others and a direct access to countries in Asia-Pacific, Africa and Latin
America where Shantha Biotechnic has distribution networks.
Sanofi-aventis
has signed an agreement with Pomnivest, the investment division of Russia’s
State Corporation to acquire a local insulin plant under the control of the
latter. The company will now produce anti-diabetic drugs locally to meet the
demands of the Russian market. This development is part of the Russian
government’s Project Pharmapolis to bring advanced healthcare technologies to
the country.
Partnerships and alliances
Shantha
Biotech, a part of Sanofi Pasteur secured a contract with the United Nations to
supply pentavalent DTP vaccine SHAN5 (combined vaccine of diphtheria,
pertussis, tetanus, hemophilus influenza B and hepatitis B). The deal worth
$340m is stretched over 2010-12. This further expands Sanofi Pasteur’s vaccine
portfolio used within WHO’s Expanded Program on Immunization (EPI).
Sanofi-aventis
entered into a partnership with Glenmark Pharmaceuticals to develop and
commercialize products indicated for pain management. The new drugs are
vanilloid receptor antagonists which are indicated for various types of pain
including osteoarthritic pain and diabetic neuropathic pain. Glenmark will
receive payments upon reaching certain milestones accruing to $325m.
Sanofi-aventis will market the developed products in the US, EU and Japan and
will hold co-marketing rights in Brazil, Russia and China. Glenmark will retain
exclusive commercial rights in India. The partnership includes development of a
first-in-class pain drug GRC 15300.
Sanofi
Pasteur has entered into an agreement with Butantan Institute to supply 18m
doses of A(H1N1) influenza virus vaccine to the Brazilian government. Under the
partnership, the antigen bulk will be manufactured at Sanofi-aventis’ facility
and the final formulation and packaging will take place at Butantan’s Sao Paulo
facility. The deal will significantly boost Sanofi-aventis’ vaccine division.
SWOT
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Table 26: SWOT analysis – Sanofi-aventis
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Strengths
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Weaknesses
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Sanofi-aventis is the second largest pharmaceutical company in the
world with expertise in cardiovascular, pain management products and
vaccines.
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Discontinuation of R&D on molecules including eplivanserin for
insomnia and idrabiotaparinux for atrial fibrillation on grounds of high
risk-benefit ratio and insignificant clinical efficacy.
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Multaq has been recommended by the European Society of Cardiology
(ESC) in 2010 as the first line treatment option for atrial fibrillation
(AF).
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Sanofi Pasteur’s operations in India have been bolstered through
its acquisition of Shantha Biotechnics. The company has an agreement with the
UN to supply pentavalent DTP vaccine.
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Sanofi Pasteur has supply agreements with Butantan to supply
A(H1N1) influenza vaccine to the Brazilian government.
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Opportunities
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Threats
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Acquisition of Medley strengthens position in the Brazilian
market.
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Significant revenue loss due to patent expiry of key products
including Plavix, Aprovel, Taxotere and Eloxatine in the next five years.
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Joint venture with Minsheng Pharmaceuticals in China to
manufacture vitamin and mineral supplements and partnership with Glenmark to
develop drugs indicated for pain.
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Sanofi-aventis's bid to acquire the biotechnology company Genzyme,
which if completed will add products indicated for rare diseases.
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