Sanofi ( SNY) Cowen Group Health Care Conference Call March 6, 2012 06:00 am ET Executives Elias Zerhouni - President, Global R&D Analysts Steve Scala - Cowen and Company Presentation Steve Scal a - Cowen and Company
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And I think when you look at the sales, obviously what you're seeing is that the growth platforms have performed and when you look at the incremental sales they have gone up, even when we look at Genzyme at a 5.3% constant exchange rates. Genzyme contributes 40% of the $10 billion growth since 2008 due to growth platform. So when we you look at that, you will realize that our dependency on patented products have come down. If you look at the composite contribution of growth platforms, they went for 42% in 2008 to 65% in 2011 and conversely our dependency on the key [generic] side products has gone down from €7.5 million to €3.15 million and you know in 2012 we are seeing the end of the patent cliff with Plavix and Avapro coming off patent as well.So I think the strategy has functioned and if you look at the earning per share, it did not collapse as many people predicted because the strategy worked. On the other hand, sustainability of the strategy is going to depend on continuous investment in the growth platforms, but R&D performance as well. So when you look at our strategy, it is very, very clear that the one of the pillar is going to be increase in innovation and R&D, pursuing the external growth opportunities as we have done over the past three years including, for example Genzyme, the Genzyme acquisition, but many others, in other markets especially the emerging markets where we have had a significant success and we passed €10 billion sales last year. We are the first company to do that. So it's still necessary for us to continue the strategy and adapt the structure for future challenges and opportunities. So how do you deliver sustainable growth and have a consistent performance is really the strategy, part of it is the increase in innovation and R&D. So what have we done there?
Well the first thing that was quite obvious to me when I started advising Chris before I became President of Global R&D is that when you maybe look at R&D organizations what you see is what was decided 10 years ago before, seven years before, five years before. And when you look at the portfolio at Sanofi, it was very clear that it wouldn’t make it on its own.So clearly we decided to look at the portfolio as it was and define our strategy in three buckets. One is what I call the short term. You have that you have, you need to absolutely sustain what you need to do. You need to execute and you need to really make sure that what gaps you have you need to fill. And that was really what we did the first year when we pruned the development portfolio, focused on opportunities, looked at alliances, looked at things that we knew had a prospect to basically hit if you will the pipeline in 2011, 2012, all the way to 2015. The clear mid term requirement is that you really have to have a strategy that you can execute and therefore you need to have an engine of R&D that you can count on and we realized that an efficient R&D organization needed to have synergies way beyond what was done before. And that's why the last year I took the decision to close sites, consolidate for example research and early development in Boston and exploit the economies of scale across the company and improve the R&D cost structure. Read the rest of this transcript for free on seekingalpha.com