Sanofi restructuring claims its JV for vaccines with Merck

Sanofi CEO Olivier Brandicourt

Just weeks after Bloomberg reported that Sanofi's ($SNY) new CEO, Olivier Brandicourt, was mulling over the fate of its 20-year-old European joint vaccine development and commercialization venture with Merck ($MRK), the two pharma giants have agreed to call it quits.

The original news story highlighted Brandicourt's disenchantment with Sanofi Pasteur MSD's development pipeline. Based in Lyon, the joint venture was given little credit for productivity at a time that Brandicourt is in the middle of a reorganization, searching for new ways to cut costs.

The group reported $330 million in revenue in the first 6 months of 2015. But while the JV supplies about half of Europe's vaccines, it's reported little growth in the last two years. Both companies, meanwhile, have big vaccine R&D operations of their own. Sanofi has finally begun commercializing its dengue vaccine after 20 years of development and Merck has been at work on an Ebola vaccine--being prepped for a 2017 regulatory filing--and other jabs.

The split comes as the fast spread of the Zika virus is inspiring the latest in a series of rush campaigns to develop a new vaccine as leading companies try to deploy new technologies that promise to compress development timelines.

Sanofi's ongoing restructuring has heightened fears of cutbacks, particularly in France, where its research operations have been given little credit for innovation. The pharma giant has been steadily shifting its focus to the Boston area, though, where it acquired Genzyme.

"After carefully considering our individual strategic priorities, alongside the economic and regulatory environments for vaccine operations in the European Union, we have mutually agreed that it is in our best interests to manage our vaccine product portfolios independently," the two companies said in a joint communique. "We believe that focusing our efforts on opportunities unique to our respective companies will better position us to drive growth, execute in a more efficient manner and optimize vaccine coverage. By bringing vaccines more rapidly to market, both companies would deliver greater value to all stakeholders."

- here's the release

Read more on