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Sanofi-aventis announces job cuts

Sanofi-aventis has announced that job losses in its sales division will be a part of restructuring plans for the company as it seeks to cut costs

Sanofi-aventis (S-A) has announced that job losses in its sales division will be a part of restructuring plans for the company as it seeks to downsize and cut costs.

Speaking at the Goldman Sachs Healthcare Conference in Los Angeles, California, chief financial officer of S-A, Jerome Contamine said: "We are restructuring, we are cutting our costs down. We are changing our marketing model – we are merging sales forces, reducing sales forces. We are having a multiproduct sales force."

The measures come as S-A attempts to offset lower revenue due to generic competition for big-selling products, continuing healthcare reform in the US and price cuts for drugs in Europe.

S-A's sales have already suffered losses from generic competition to blockbuster drugs Eloxatin (oxaliplatin) and Plavix (clopidogrel bisulphate) in the US and Europe respectively, with further losses projected to follow.

The decision of several governments in Europe to cut the price of drugs as part of healthcare savings in the economic downturn has also hit French-based S-A hard, with Contamine suggesting that European governments should be aware that by being too harsh in their cuts they will "put the whole pharma industry at risk".

Regarding S-A's cost-cutting plans, Contamine said the company were on track: "[S-A has] the ability to save €2bn by 2013, compared to 2008, before tax. We had saved €480m by end of 2009. We are ahead of our programme – we should reach €2bn before 2013 and we can see if we can save more."

As well as downsizing, S-A are looking to other areas to offset the projected sales losses. These include further investment in emerging markets where the company reported 18.1 per cent growth in Q1 2010 (excluding the company's H1N1 vaccine). Contamine said he predicted S-A to double the amount of sales in these markets from 2008 to 2013, with consistent double digit growth.

The company also expects further growth in consumer healthcare after the acquisition of US-based Chattem in late 2009 saw Q1 2010 growth in the sector reach 42.5 per cent.

Audio of Contamine's talk, as well as the slideshow presentation, can be found on the S-A website.

17th June 2010

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