COMPANY PROFILE -Sanofi
Business Sector :Pharmaceuticals
Operating Geography :France, Europe, Global
About Sanofi :Sanofi Corporation was incorporated in 1994 as a société anonyme, a form of limited liability company, for a term of 99 years. In 2004, after a merger with Aventis, it operated under name Sanofi-Aventis until 2011.Since May 2011, it has operated under the commercial name “Sanofi”. Sanofi is a leading global healthcare company, fifth largest pharmaceutical company globally by sales, focused on therapeutic solutions. Sanofi has three principal activities: Pharmaceuticals, Consumer Healthcare (CHC) and Vaccines via Sanofi Pasteur. Sanofi sells prescription drugs mainly to wholesale drug distributors and rare disease products are also sold directly to physicians.
Sanofi Revenue :
€ 35.05 billion (FY ended December 31st, 2017)
€ 33.82 billion (FY ended December 31st, 2016
Ownership / Major shareholders :L’Oréal 9.43% (Voting rights 16.95%), BlackRock 5.68% (Voting rights 5.11%). (Major shareholders as of 31st January, 2018)
Competitive Analysis of Sanofi
|1. A global leader in healthcare|
2. Consistently strong financial performance
3. Portfolio expansion through strategic acquisitions
|1. Over dependence on Lantus and other flagship products
2. Major increase in other expenses
|1. Potential in Vaccines|
2. Growth opportunities in emerging markets
3. Use of digital technologies to improve R&D and clinical outcomes
|1. Increasing availability of Counterfeit drugs
2. Threat from cheaper generic alternatives
3. Fierce competition with regards to market share
4. Increased transparency expectations leading to new regulations
5. Pricing pressures due to concentration of the US market
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Detailed SWOT Analysis of Sanofi
StrengthThis section is available only in the 'Complete Report' on purchase.
WeaknessThis section is available only in the 'Complete Report' on purchase.
This section is available only in the 'Complete Report' on purchase.
1. Increasing availability of Counterfeit drugs: Counterfeit drugs is a growing menace especially in the emerging markets in Asia and Africa which is impacting major pharma players including Sanofi. Counterfeit Drugs affect Sanofi in two ways, first by decrease in sales due to low pricing and second by affecting the brand image of Sanofi, if counterfeit drug has any side-effects and below par performance.
2. Threat from cheaper generic alternatives: Branded pharmaceutical products lose their patents which pave the way for cheaper generic alternatives. This impacts the sales of the original brands in a major way. For example, Basaglar is generic drug of Lantus, from Eli Lilly and Boehringer Ingelheim Pharmaceuticals, whose price is approximately 15% less than of Lantus. Since its introduction in US 2016, Sanofi has lost revenue of €760 million from Lantus in 2017. In 2018, Mylan and Biocon have also secured EU approval for their their biosimilar for Sanofi’s Lantus which will further impact the company.
3. Fierce Competition: There is a huge competition among big pharma companies to capture the market share, the two-important factors that determine the winner is; the first mover in respective drug line, and complexity of manufacturing ground-breaking drug. An Example of this is U.S. Food and Drug Administration’s approval of two PCSK9 inhibitors, Repatha and Praluent from Amagen and Sanofi. Initially, the analyst estimated revenue of $6.1 billion for Praluent, but Sanofi has lost both first mover advantage and patent due to intense competition from Amagen and new product introduction by Pfizer in next two years, and analyst have revised their estimates.
4.Increased transparency expectations leading to new regulations: There are two types of transparency laws advocated by states in US; state price transparency laws and healthcare provider transparency laws. Both these laws impose obligations for price reporting, annual registration of sales representatives, and to submit details of payments made to HCPs by sales representatives. One of the impact with the new amendments is the pricing information of a drug will be available in public domain. This is also expected decrease the competitive advantage and lead to price capping by Government in cases of exorbitant pricing. Hence it would affect the revenue and profit margin of the company.
5. Pricing pressures due to concentration of the US market: The United States is one of the major markets for global drug makers. As the managed care organizations (MCOs) and pharmacy benefit managers (PBMs) are growing in size following major consolidation deals, pharma companies such as Sanofi are seen facing increased pricing pressure and usage negotiations. Despite a reduction in rates and increased negotiations, Sanofi suffered a setback in 2016 when CVS and UnitedHealthcare (UHG) announced that it would exclude Lantus/ Toujeo from commercial and MMC (Medicaid Managed Care) template. This would lead to increase in costs for Lantus/ Toujeo for patients under CVS and UHG, thus reducing its effective sales. Thus PBM and MCO concentration is likely to sustain and increase pricing pressures, negatively impacting Sanofi’s revenues margins.
Major Brands :Pfizer, Merck, Bristol Myers-Squibb
Key Business Segments / Diversification :
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :Open Table Preview
|Bioverativ||Hemophilia specialist||2018||Acquisition||Will strengthen Sanofi’s presence in treatments for rare diseases|
|Ablynx||Biotechnology, nanobodies||2018||Acquisition||The deal expands new Rare Blood Disorders franchise for Sanofi and strengthens its R&D platform|
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References used in Sanofi Analysis Report
1.Integrated Report - https://www.sanofi.com/media/Project/One-Sanofi-Web/sanofi-com/en/investors/docs/2017_Integrated_Report.pdf
2. Annual Report - https://www.sanofi.com/media/Project/One-Sanofi-Web/sanofi-com/en/investors/docs/Annual_report_form_20F_2017.pdf
3. Insights - https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/the-road-to-digital-success-in-pharma
4. Economic affect pharmaceutical industry - https://bizfluent.com/list-6865506-economic-affect-pharmaceutical-industry-us-.html
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Sanofi SWOT and PESTLE analysis has been conducted by Pavankumar S and reviewed by senior analysts from Barakaat Consulting.