Sanofi argues its R&D costs are too high, but backs down on Toulouse

Score another win for the French government in its public tangle with Sanofi chief Chris Viehbacher over its proposed R&D restructuring plans. Industry Minister Arnaud Montebourg told reporters that the pharma giant ($SNY) has agreed to drop plans to shutter or spin out R&D operations out of Toulouse, significantly reducing the overall scope of its cutbacks in France. But an internal report spelling out Sanofi's argument on restructuring indicates that this struggle may be far from over.

Montebourg has been an outspoken critic of Viehbacher ever since his plans to cut up to 2,500 staffers made headlines around the world.  But in recent weeks Sanofi has steadily scaled back the job cuts in the face of intense criticism, limiting itself to eliminating 900 jobs through attrition. The fate of Toulouse, though, still hung in the balance, as Sanofi raised the prospect of an outside group moving in to acquire control. 

"Sanofi has said the Toulouse centre is not part of its restructuring plan anymore, except for infectious disease research and some support functions," said Montebourg, according to a report in Reuters.

Le Monde, meanwhile, just poured fuel on the fiery discussion, publishing an internal R&D review that Sanofi handed over to the French unions as it made its case for streamlining the French research operations, which Viehbacher has already scorned for failing to produce any big new drug in 20 years.

According to Le Monde, Sanofi execs said that the time it takes to develop a new molecule is 20% higher than the industry average. Over the past 15 years, the average cost of developing a new drug has been $7.9 billion, compared to $5.8 billion for the top 12 pharma groups in the world. And each new molecule entering development over the past three years came with a cost of 105 million euros, three times the industry average of 35 million euros.

Viehbacher has been making the same general case on poor productivity in public for years, without spelling out some of the exact internal comparisons it handed to the unions. Labor groups and the French government, though, have been focused on the bottom line, which has done well under Viehbacher's tenure. 

- here's the Reuters story
- read the report from Le Monde
- get FiercePharma's take

Special Report: Sanofi - The Biggest R&D Spenders In Biopharma

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