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Sanofi-Aventis to close some plants, restructure

French drugmaker Sanofi-Aventis SA on Tuesday announced a major corporate restructuring on the heels of new safety concerns that could hurt sales of a key drug, its once-a-day insulin Lantus.
/ Source: The Associated Press

French drugmaker Sanofi-Aventis SA on Tuesday announced a major corporate restructuring on the heels of new safety concerns that could hurt sales of a key drug, its once-a-day insulin Lantus.

The world's third-largest pharmaceutical firm said it is reorganizing research operations to boost innovation. The plan includes offering voluntary buyouts to an unspecified number of employees in France, plus closing four research sites and possibly selling a fifth one there. Those sites employ about 650 people. The company said it is not planning any layoffs.

Sanofi-Aventis also is looking at selling or converting to other uses laboratories that do preclinical research — studies in cells or lab animals — in the U.S., United Kingdom, Japan and Spain.

The Paris-based company is a top maker of flu and other vaccines and also sells the popular anticlotting medicines Plavix and Lovenox, breast and prostate cancer drug Taxotere, and insomnia treatment Ambien.

Lantus, the company's third-best-selling drug with revenue up 28 percent at nearly $3.5 billion last year, is key to the company's growth. Some older drugs, including top two sellers Lovenox and Plavix, will face generic competition and lose much of their sales in the next few years.

In late April, Sanofi-Aventis said it would narrow its research focus to fewer disease areas, something top competitors including Pfizer Inc. and Merck & Co. already have done.

Sanofi said it was halting development of three late-stage drugs, including a once-promising one for depression, plus about 10 other drugs in early or mid-stage testing.

The company said Tuesday it will continue to invest in research but focus more on partnerships with academic institutions, biotech companies and other research entities — as most companies in the pharmaceutical industry have been doing. It also plans to simplify its research organization "for greater reactivity," re-evaluate and refocus central research functions based in the Paris area, and give more authority to make decisions to other facilities.

"The objective of this new R&D model is to propose innovative solutions that respond to specific, unmet needs of patients," Chief Executive Christopher Viehbacher said in a statement. He said the company would develop scientific networks with outside entities "to strengthen creativity" and would choose a more entrepreneurial approach to research.

Other large drugmakers, particularly Pfizer, have made similar changes in the last year or so.

Sanofi's announcement comes after the European Association for the Study of Diabetes last Friday said a review of an insurance database of 127,000 patients in four European countries found patients who took Lantus were slightly more likely to be diagnosed with cancer than patients who used other types of synthetic insulin. The researchers said the increased risk amounted to one additional person developing cancer, out of every 100 patients using Lantus for about 1 1/2 years.

The association called the results inconclusive and urged further study. Sanofi-Aventis officials have since been on the offensive, with a company statement, conference call with analysts and video message from the chief medical officer all defending the safety of Lantus.

Other experts and some patient groups, including the American Diabetes Association, have urged patients to discuss the situation with their doctor rather than stopping use of Lantus. Patients with Type 1 diabetes and many with advanced Type 2 diabetes must take insulin every day to prevent life-threatening complications.

In New York trading Tuesday, Sanofi rose 1 cent to end at $29.49, while many pharmaceutical companies and broader market indexes were down.