French drugmaker Sanofi ($SNY) is soon to announce some "sizable" cuts to its payroll, according to Stat, part of new CEO Olivier Brandicourt's plot to engineer a turnaround.
Citing unnamed sources, Stat's Ed Silverman reported that Sanofi is expected to mount a major layoff effort to conserve cash, likely focusing on the U.S. over its native France, where labor laws make restructuring more difficult.
The report comes as Brandicourt, who took over last year, works to reverse his company's stagnant performance. The former Bayer executive outlined his plan in November, promising to build "a portfolio refocused on areas where we can win" and "a more streamlined and accountable organization." But most notable to analysts, Sanofi disclosed that it expects diabetes sales to slip about 7% in 2015 and decline well into 2018, as old cash cows face mounting competition and new products struggle to gain traction.
The quickly changing diabetes landscape has particularly affected Sanofi as the insulin Lantus, long the drugmaker's best-selling treatment, has ceded ground around the globe to newer, longer-acting alternatives. Over the past 6 months, Sanofi has signed deals that would trade up to $6 billion for the rights to some diabetes treatments that could eventually help it compete with Novo Nordisk ($NVO), Eli Lilly ($LLY) and AstraZeneca ($AZN), rivals that have surpassed it in some increasingly competitive markets.
Outside of diabetes, Sanofi's most promising pipeline assets come from Regeneron Pharmaceuticals ($REGN) through a long-held alliance. The pair scored their first approval with the cholesterol-lowering Praluent last year, and next up is sarilumab, an antibody treatment for rheumatoid arthritis up for an FDA decision by Oct. 30. Behind that is dupilumab, a potential blockbuster now in Phase III development for eczema and asthma, and a host of immuno-oncology treatments in early-stage development.
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