European operations will be consolidated within Germany and France.

Sanofi has confirmed plans to close down by year’s end its Genzyme R&D hub in Cambridge, U.K. The move would eliminate 60 jobs, some of which the company has said it will transfer to other locations. The decision is part of its plans to cut $2.9 billion in expenses by 2015 to recoup revenues to be lost as U.S. patent protection expires this year on several drugs including the blood thinner Plavix, the high blood pressure medicine Avapro, and the colorectal cancer treatment Eloxatin®.

“We are actively looking at options to minimi(z)e the number of job losses – either through transfer of roles within the Sanofi group, or through assisting impacted employees in finding alternative employment,” an unidentified Sanofi spokesman told the newspaper Cambridge News.

In February 2011, Sanofi picked up Genzyme for $20.1 billion. The hub at Cambridge Science Park is the third European R&D site to be closed by Genzyme, which is also shedding research facilities in Italy and The Netherlands. Sanofi is consolidating its R&D effort into four global hubs, one each in the U.S. [in Cambridge, MA], Germany, France, and Shanghai.

The Cambridge, U.K., shutdown reflects what Sanofi CEO Chris Viehbacher said in a February 8 interview with EuroBusiness Media was a simultaneous shrinking of its R&D and ramp-up of drug development activity that began last year: “We’ve engaged upon an ambitious plan to restructure our research operations, we’ve restructured our European commercial operations, and in all of that we’ve still managed to find time to file five dossiers for new medicines.” Just this month the firm applied for approval in the EU for the multiple sclerosis drug Aubagio™ and in the U.S. for colorectal cancer treatment Zaltrap™.

Sanofi full-year 2011 results offered guidance for 2012 that warned investors to brace for lower earnings. Those results showed a 2.4% dip in R&D expenses excluding Genzyme, which accounted for a reported 5.6% increase (7.4% at constant exchange rates) to €4.811 billion (about $6.364 billion) from €4.556 billion (roughly $6.027 billion).

For 2012, Sanofi predicted the U.S. patent protection losses and generic competition will lower its business earnings per share (EPS) reflecting operations by 12% to 15% in 2012, on top of the 5.8% loss (3.8% when based on constant exchange rates) during 2011 to €6.65 per share. But this year’s losses, according to Sanofi, would have been worse were it not for contributions from Genzyme, cost control efforts, and performance from various units pegged as “growth platforms.” When reconciled with consolidated net income from various charges, EPS actually rose about 3% last year, to €4.31 from €4.19.

Last year Sanofi finished with a 4.6% slide (2.7% at constant foreign exchange rates) in business net income from operations, reaching €8.795 billion. But when special charges were accounted for, Sanofi recorded a 4% gain in net income, reaching €5.693 billion ($7.532 billion) from €5.467 billion ($7.233 billion).

Those results reflected sales of the blockbusters set to lose patent protection this year: Plavix finished 2011 with €2.04 billion ($2.699 billion) in global sales. Avapro, also marketed as Aprovel or Karvea, saw sales tumble 11% worldwide to €1.805 billion ($2.388 Billion), reflecting growing competition from generics. Eloxatin racked up €1.071 billion, up 160%.

The U.S. effect of those sales is not as evident since the active ingredient in both is sold to an American venture managed by Bristol-Myers Squibb. On the Sanofi side, however, the company last year generated €196 million in Plavix sales, down 8% from 2010, and €49 million in Avapro sales last year, up 25.6%, but a whopping €393 million from Eloxatin, up 393%. U.S. sales were boosted by a US District Court ruling in September that favored Sanofi over Sun Pharmaceuticals, upholding U.S. market exclusivity for the drug, but the ruling is under appeal. Those numbers can be expected to slide further with the loss of U.S. patent protection and the arrival of generics.

To read the Cambridge News story, click here.

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