Sanofi swaps executives with Bayer in revamp that reshapes diabetes, spotlights China

Sanofi
Sanofi is forming two new units, Primary Care business and China & Emerging Markets, starting in 2019. (Sanofi)

You might have witnessed some asset swaps in the biopharma industry. Sanofi itself traded its animal health unit for Boehringer Ingelheim’s consumer health business. But what about an executive swap?

Not so much. But now, Sanofi is exchanging top executives with Bayer as it pushes ahead with a restructuring plan that aims to reshape its diabetes and cardiovascular business while stepping up its focus on China, already its second-largest country by sales.

Dieter Weinand, who now heads up Bayer’s pharmaceuticals division, will join Sanofi to lead a new primary care unit that combines its diabetes and cardiovascular assets with established products. At the same time, Stefan Oelrich, currently head of diabetes and CV at Sanofi, will take up Weinand’s Bayer job. Both start their new posts Nov. 1.

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In response to an inquiry from FiercePharma, Sanofi spokesman Jack Cox didn’t confirm that the two appointments were part of any deal engineered between the two European companies. Seemingly to clarify the chicken-egg question, Bayer said in a separate release on Thursday that Weinand “is leaving the company for family reasons," thus choosing the Sanofi job based in New Jersey.

Sanofi CEO Olivier Brandicourt and Weinand go way back. They were colleagues when Brandicourt led Bayer HealthCare from 2013 to 2015, and they previously worked together under the roof of Pfizer.

The appointments also put Oelrich back with his old employer. A German citizen, Oelrich officially began his career with Bayer in 1992 and spent the next 20 years at the company before joining Sanofi as general manager in Germany, Switzerland and Austria. 

Sanofi has been looking for growth outside of its traditional core areas of diabetes and cardiovascular, as sales of its old insulin stalwart Lantus plummet on fierce competition and payer hardball, and its next-generation basal insulin Toujeo faces U.S. pricing pressure that's dragging down growth. Not to mention disappointing numbers from Regeneron-partnered PCSK9 cholesterol drug Praluent, which has suffered from payer restrictions. During the second quarter, combined sales from diabetes and CV dropped 15.6% at constant exchange rates, to €1.11 billion ($1.30 billion). On the company’s earnings call, Brandicourt said he figures the Lantus headwinds have peaked.

RELATED: Sanofi and Regeneron's Praluent closes in on sales-boosting CV nod

But while older drugs in the U.S. and EU turn in lackluster performances, emerging markets represent a bright spot. Now, after extracting some older products in the developed world, Sanofi is creating a new business unit called China & Emerging Markets, to be led by current head of general medicines and emerging markets, Olivier Charmeil.

Note how the new name separates China from the rest? Cox told FiercePharma it’s meant to “highlight the focus on this particular country, which is now our second-largest individual market behind the U.S.”

Indeed, for 2017, Sanofi’s Chinese business grew 15.1% to €2.22 billion as the country breathed new life into some of the company’s older drugs. While sales of Lantus crashed 26.6% in the U.S., they grew 15.8% in China, to €319 million. Blood-clot fighter Plavix—which long ago fell to U.S. generics—also saw net sales of €758 million in China, up 12.1%. Plus, Sanofi is also introducing newer drugs to the country; Aubagio just recently became China's first oral disease-modifying therapy for multiple sclerosis.

RELATED: Job cuts among ‘tangible changes' in Bayer’s R&D review: Reuters

Meanwhile, Bayer, which sealed its Monsanto crop acquisition earlier this month, is also reportedly weighing its options for its healthcare operations. Citing a person familiar with the company, Reuters recently reported that Bayer is considering outsourcing its drug-testing services—a move that would cost up to 1,000 positions, according to German media. The review comes as Bayer's top-seller, blood thinner Xarelto, will lose exclusivity in 2024, with no near-term growth driver in sight to fill the gap.

The appointments also came shortly after Sanofi replaced its retiring longtime CFO Jérôme Contamine with Jean-Baptiste Chasseloup de Chatillon, formerly CFO of French automaker PSA Group.