If one looks past all of the debate about the $20 billion price Sanofi-Aventis agreed to pay for Genzyme, one has to wonder whether CEO Chris Viehbacher (photo) and his team can integrate Genzyme, step up the Boston company's quality control, and make the deal pay off. Furthermore, can they do all of this without putting a chill on Genzme's culture or scaring off top talent?
It will be a fine line to walk, analysts say. Take Genzyme's manufacturing woes, which began in 2009. The company has been striving to overhaul its key Boston-area plant and to return stocks of its rare-disease drugs to normal. As Dow Jones points out, finishing that process and expanding production in Framingham, Mass., are the only ways Genyme can hit its financial targets.
Viehbacher says Sanofi can help Genzyme deal with its FDA consent decree and create "a culture of quality." Putnam Associates consultant Kevin Gorman agrees, saying the French drugmaker has some serious manufacturing skills to bring to the party. But Sanofi can't push too hard or treat Genzyme's people as if they're needy, Gorman explains. It will have to be a collaborative approach.
Viehbacher handled some major integrations when he was at GlaxoSmithKline, notably the big merger that brought SmithKline into the fold, as Bloomberg notes. And he has pointed out that Sanofi's recent buys have proven that it can integrate "many business models." He has used the Chattem deal as an example, saying Sanofi "kept everybody and also found synergies."
But Big Pharma taking over a biotech firm? Industry watchers say there are plenty of inherent pitfalls. Forbes suggests that Viehbacher hand out raises to Genzyme's top talent immediately--to show Sanofi really values them--and focus any cuts on back-office functions. Perhaps he will; at the very least, he's promised to tread lightly until everyone gets to know one another's business. But this is a man known at Sanofi as the "smiling killer," and the Genzyme negotiations show he can put on a poker face.