Sandwiched between Novartis and GSK in R&D spending is sanofi-aventis. Even though it holds fourth place, the firm saw a 4% decrease in expenditure to €4.401 billion (roughly $6.25 billion) from €4.583 billion (about $6.51 billion).
Like GSK, sanofi-aventis stepped up R&D spending on vaccines, which rose from $491 million in ’09 to $517 million last year. But the company’s pharma R&D expenditure fell by 5%, to $3.884 billion.
The French pharma giant last month announced plans to acquire Genzyme for $20.1 billion. If it goes through, there may be more cutbacks and restructuring. Sanofi-aventis is already planning to shut down its R&D facility in Great Valley, PA, eliminating 400 positions this summer. The majority of workers were reportedly offered jobs at other facilities, and the clinical trial supply staffers were spared.
Sanofi-aventis did not offer specific 2011 or 2012 R&D budget guidance but did say it plans to cut its fixed R&D costs in the next few years from 60% to 50% and make up the difference in activity through more open innovation. The company expects its 2011 earnings to be off as much 5% to 10% from this year’s $9.68 a share, citing pressure to contain prices, especially in Europe, and competition from generics.
Next year, the company loses patent protection for Plavix, which is commercialized in partnership with Bristol-Myers Squibb (BMS). Plavix accounted for €2.083 billion (about $2.963 billion) in net sales for sanofi-aventis and $6.666 billion in BMS’ net sales in 2010. Thus, Plavix represents roughly 6.9% of total sanofi-aventis’ net sales and about 34% of BMS’ net sales last year.
As M&A and restructurings threaten R&D spending—not to mention all those R&D jobs—this year and beyond, it begs the question: Who will make up the difference? Two articles, accessible on GEN’s website, discuss possible sources for additional research funding: NIH and academia.