Transforming Sanofi-Aventis

Transforming Sanofi-Aventis
Case Code: BSTR358
Case Length: 18 Pages
Period: 2008-2009
Pub Date: 2010
Teaching Note: Not Available
Price: Rs.300
Organization: Sanofi-Aventis
Industry: Healthcare, Pharmaceuticals
Countries: France; Global
Themes: Growth strategy, Diversification, Transformation
Transforming Sanofi-Aventis
Abstract Case Intro 1 Case Intro 2 Excerpts

"At a time when every drug giant is (or ought to be) urgently experimenting to discover the right business model, Sanofi has long been perceived as too rigid, too traditional, maybe even too French, to learn Pharma 2.0... [T]he legacy of this titan of French industry, badly damaged in recent years, now depends entirely on Viehbacher and his next-generation team."

- Walter Armstrong, Pharmaceutical Executive, in July 2009.


For Christopher A. Viehbacher (Viehbacher), CEO of pharmaceutical company Sanofi-Aventis, the first eight months in the company were nothing short of hectic. Viehbacher had taken charge in December 2008, at a time when Sanofi-Aventis had increasingly come to be viewed as a French relic incapable of keeping up with the rapid changes in the pharmaceutical industry. Determined to transform the company into a global diversified healthcare leader, he took various tough decisions that earned the appreciation of analysts. The analysts said that the initial results looked positive with the company performing very well in 2009.

It reported sales of €27,438 million for Q2 2009 as compared to €6,689 million for the corresponding period of 2008.3 Its stocks had also grown faster than that of its peer group - a complete reversal of fortunes for a company whose stocks had been considered the worst performing of its peer group barely a year earlier (Refer to Exhibit I for Sanofi-Aventis' consolidated income statement for the first half of 2009; and, Exhibit II for its five-year stock chart).

However, analysts also felt that, going forward, Viehbacher was likely to come up against many tough challenges. The Paris-based Sanofi-Aventis was the world's third largest pharmaceutical company as of 2009. However, experts felt that it had a costly and unproductive research and development (R&D) pipeline, with few new products in sight to offset the impact of patent expiries of its top-selling drugs between 2009 and 2013...

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