Bloomberg News

Sanofi to End Toulouse, Montpellier Research, Union Says

July 05, 2012

Sanofi (SAN) plans to end research in Toulouse, where the blockbuster Plavix blood thinner was developed, and Montpellier, further downsizing French operations, a union representative at the company said.

About 600 jobs are at risk in Toulouse and 200 in Montpellier, Thierry Bodin, a representative of the CGT union, told reporters in Gentilly, outside of Paris, after a meeting with managers today. Europe’s third-biggest drugmaker wants to regroup its research in the Paris region and around Lyon, he said. The company also plans to eliminate support functions and cut jobs at its Pasteur vaccine division, Bodin said.

While Sanofi hasn’t given an exact figure for the number of jobs to be cut, an estimate of about 2,000 is “probably close to reality,” Bodin told reporters. Paris-based Sanofi may seek to sell the Toulouse site, he said.

Chief Executive Officer Chris Viehbacher began an overhaul of Sanofi’s research in 2009, reducing headcount, closing plants and dropping the least promising projects. At the same time, he stepped up acquisitions and partnerships to gain new products, including the $20.1 billion purchase of U.S. biotechnology company Genzyme Corp., the world’s largest maker of treatments for rare genetic diseases, last year. Sanofi said in September it was targeting 2 billion euros ($2.5 billion) of cost cuts through 2015.

September Plan

At today’s meeting, Sanofi laid out areas it wants to discuss with unions, with the goal of coming up with a plan in September, Jean-Marc Podvin, a spokesman for the company, said in a telephone interview. No job cut figures were given and all options remain open for Toulouse, he said. Montpellier could become a center focused on clinical development, he added.

Sanofi has five centers for pharmaceutical research in France -- in Toulouse, Vitry-Alfortville, Montpellier, Strasbourg and Chilly-Mazarin, according to Bodin.

“I have no idea about what they want to do with Vitry, for example,” Pascal Collemine, another CGT representative at the company, said in an interview in Gentilly. “They are tearing it all down, almost a building torn down each month. It does raise questions. These successive waves of job cuts are highly de- motivating. It’s certainly not the right way to boost research productivity. Research takes time, and some stability.”

The French drugmaker is considering boosting research in Vitry and Chilly-Mazarin, Podvin said during the interview.

Strasbourg, Lyon

According to the plan being considered, the Strasbourg center would become a “platform for collaboration” with academia and biotech companies, Podvin said. Lyon, where Sanofi’s Pasteur division is based, would become a research center for infectious diseases, he added.

The aim would be for Sanofi to build “research ecosystems” in the Paris region, Lyon and Strasbourg, Podvin said.

Unions want Sanofi to “freeze” the overhaul until the plan can be properly negotiated, Bodin told reporters today.

Sanofi’s “strategy is to reduce internal research and to have other actors, such as small biotechs, academic research, as a sort of panacea to find new molecules, new vaccines,” Bodin said. “This may look pretty on paper but we all know that for collaboration to work, strong internal expertise is needed. Sanofi’s management is destroying this today.”

The maker of the Lantus diabetes medicine and Lovenox blood-thinner said in November it would eliminate jobs in the U.S. and Europe after buying Cambridge, Massachusetts-based Genzyme.

Viehbacher and Christian Lajoux, the head of Sanofi’s French unit, had a meeting scheduled with French Productive Recovery Minister Arnaud Montebourg on July 2, according to Montebourg’s agenda, available on the ministry’s website.

In November, Sanofi told unions it planned to eliminate 555 research jobs in Italy, Hungary and Germany, 900 in the U.S., and to begin negotiations for cuts in other countries, Bodin had said at the time.

The company has already slashed about 4,000 jobs in France over the past three years, according to the unions.

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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