Sanofi today showed no signs of backing away from a confrontation with France's socialist government. Sanofi CEO Chris Viehbacher carefully but firmly asserted that R&D cuts at two of its French research complexes will go ahead, with details to come in September after the company ($SNY) has had a chance to hammer out all the details with union representatives.
Reeling from the news that big companies like Peugeot are terminating thousands of French workers, Industry Minister Arnaud Montebourg has drawn a line in the sand.
"I told [Mr. Viehbacher] that we already had enough trouble limiting hemorrhages at companies that are losing money…to accept that ultra-performing companies start destroying jobs," the minister said recently, according to a report in The Wall Street Journal.
Viehbacher's response: "I make no apologies for being a profitable company."
Over his four-plus years as CEO at Sanofi, Viehbacher has been an outspoken critic of R&D waste. And France, which traditionally has hosted half of the company's research efforts, has not performed well.
"Out of our research in France, we haven't really developed a new molecule in 20 years," Viehbacher noted, according to Bloomberg. Complicating the issue is a lengthy two-year drought in new drug approvals for Sanofi.
The pharma giant has been shifting R&D into major hubs, with R&D hotbeds like Boston becoming the central focus in the new paradigm. Locations like Toulouse in France find it hard, if not impossible, to compete.
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