Sanofi's Prescription for Growth: Drug Sales in the Middle Kingdom
21 March 2017 - 4:41PM
Dow Jones News
By Preetika Rana
BEIJING-- Sanofi SA expects its drug sales in China to grow at
least 10% this year, helped by its push outside cities and efforts
to tailor medicines to suit local needs, senior executives
said.
Sales in China last year exceeded EUR2 billion ($2.15 billion),
making it the French company's third-largest market after the U.S.
and France. Drugs accounted for EUR1.8 billion, with the rest from
vaccines and consumer health products.
Sanofi said its drug division outpaced rivals in China last year
with sales growth of about 10%--excluding the impact of currency
fluctuations--though overall sales rose only 0.5% as Beijing's
newly tightened vaccine-distribution rules, meant to prevent
illegal sales, also created shortages. Sanofi said its vaccines
business has shown an uptick this year.
In a large, complex market like China, the "agility of the
company to adapt to all those challenges makes a difference,"
Olivier Charmeil, executive vice president for emerging markets,
said in an interview.
Globally, Paris-based Sanofi is under pressure to replenish its
drug pool as sales slow for the blockbuster diabetes drug Lantus,
which lost U.S. patent protection in 2015. But its oncology
ambitions suffered a blow when a multibillion-dollar bid for San
Francisco-based cancer-treatment company Medivation Inc. fell
through last April. In December Sanofi's talks with Actelion Ltd.,
which focuses on rare diseases, ran aground when the Swiss company
began exclusive negotiations with Johnson & Johnson.
While Sanofi is still counting on acquisitions, it is also
betting on emerging markets, Mr. Charmeil said. Led by China, they
accounted for EUR9.5 billion of Sanofi's EUR33.8 billion in sales
last year.
Jean-Christophe Pointeau, Sanofi's China head, said he expected
the company's drug sales in China "to continue to grow
double-digits" this year as volume expands. He didn't offer
specifics.
Sales got a lift last year from a push at government-run health
clinics, where Sanofi began giving doctors guidance on its
treatments for chronic diseases such as diabetes and respiratory
ailments, which cause millions of deaths in China every year. Mr.
Charmeil said the push has covered more than 3,500 clinics and will
continue this year. A separate program trains doctors at rural
hospitals.
In recent years, Sanofi has tailored some products for China.
For example, Eloxatin--typically prescribed for colorectal
cancer--is now used to treat liver cancer in China, after the
company conducted studies there that demonstrated its
effectiveness. Oncology drugs last year became Sanofi's
fastest-growing category in the country.
The company plans to launch nearly a dozen drugs in China by
2020, including some customized to suit the local market, like
Eloxatin.
The world's second-largest drug market after the U.S. has been
tough for foreign players to crack. In particular, a rule requiring
local clinical studies on imported drugs has meant years of delay.
On Friday, the China Food and Drug Administration said it is
considering doing away with this rule and expects to decide this
year.
Mr. Pointeau said the change would attract greater investment
from drugmakers and dramatically reduce the time to introduce
blockbuster treatments.
"It's a huge, huge breakthrough," he said.
Write to Preetika Rana at preetika.rana@wsj.com
(END) Dow Jones Newswires
March 21, 2017 01:26 ET (05:26 GMT)
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