Sanofi Pasteur MSD, the European vaccines joint venture between pharma giants Sanofi ($SNY) and Merck ($MRK), has been around for 22 years. But now, the pair has decided that's long enough.
The companies are dissolving the joint venture, saying they're better off managing their vaccine portfolios on their own, according to a statement. The drugmakers will fold their respective European vaccine businesses into their own ops and pursue separate growth strategies on the continent.
The split is expected to wrap up by the end of this year, pending local labor laws and regulations, they said. Any impact on employees "will be managed responsibly," they said.
The 50/50 venture, set up in 1994 to develop and market vaccines from both companies' pipelines across 19 European countries, hauled in €824 million in sales last year, but its growth trajectory has flattened out. Its top seller is Merck's blockbuster HPV vaccine Gardasil, and flu vaccines chip in their fair share, too.Sanofi CEO Olivier Brandicourt
For Sanofi, it's the latest reorganization move from new CEO Olivier Brandicourt, who announced in November that the French drugmaker would be targeting $1.6 billion in cost cuts to help spur a turnaround. Struggling under less-than-rosy projections for its anchor diabetes franchise, the company has vowed to focus in on areas where it wants to build scale and bow out of those it doesn't. For example, it's working on a trade with Boehringer Ingelheim to ship off its animal health unit in exchange for the German pharma's OTC products. Sanofi has also canned a pair of marketing deals on underperforming products.
Now, the vaccine giants will be going head-to-head in Europe; they already compete elsewhere as two of the top 3 players in the vaccines food chain. GlaxoSmithKline ($GSK), which added most of Novartis' ($NVS) vaccines unit as part of the companies' multibillion-dollar asset swap last year, ranks No. 1 globally.
- read the release
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