Friday, July 30, 2010

“Sanofi CEO Talks Merger Philosophy” plus 2 more

“Sanofi CEO Talks Merger Philosophy” plus 2 more

Sanofi CEO Talks Merger Philosophy

Posted: 29 Jul 2010 12:36 PM PDT

Sanofi-Aventis posted earnings that beat analyst forecasts by 8%, bragged about a growing pipeline of new medicines, and predicted it could navigate a wave of upcoming patent expirations.

Nobody really paid any attention to all that boring stuff, though, because all anyone really wants to know about now is Sanofi's widely reported informal merger negotiations with Genzyme, the Cambridge, Mass.-based maker of drugs for rare diseases.

Sanofi chief executive Christopher Viehbacher was cool and collected in a phone interview this afternoon, twice refusing to comment on "rumors and speculation" related to a Genzyme deal. But he did talk about his general philosophy about pharmaceutical deals, which he says has not changed in several years. The only thing he has ruled out are mega-mergers, like those done by Pfizer and Merck, and that leaves small (less than $5 billion) and medium (less than $20 billion) acquisitions.

"I've been hunting for three or four years -- long before I came to Sanofi," Viehbacher says. "It's very curious, because there are things you want to buy and things you can buy. The things you want to buy, often the numbers don't actually work." The trick? "Finding deals that do both."

He said that too often, desperate drug companies do deals just because they can get done. Viehbacher says what he really wants are deals that increase not only earnings, via cost-cuts, but also sales. Only by creating better growth, he says, will pharmaceutical firms boost their price-to-earnings ratios and, therefore, their share prices.

He also says he wants to find businesses where products are protected by forces other than patents, in order to alleviate the rapid drops in sales that are creating problems for drug firms in general.

When asked how much price matters when considering a potential deal, Viehbacher said "value is always going to have a relationship to price" but that "you can't just do an acquisition by the numbers." What he is really looking for are opportunities where there is something important the current management is not doing, or where Sanofi can bring resources to bear that the smaller company lacks, like capital, regulatory expertise, or marketing power.

For example, he says, Sanofi's acquisition of over-the-counter marketer Chattem combines consumer-marketing prowess with Sanofi's allergy drug Allegra, which could become a big consumer product in the right hands. "I've seen too many deals where a lot of money is spent and no value is created."

A Genzyme deal would fits both of these criteria. Fixing its manufacturing problems could lead to rapid revenue growth just as Sanofi is losing sales to patent expirations. And the manufacturing problems certainly represent the kind of problem a new management team might think it could fix. The big questions, then, are whether Sanofi can get it for a reasonable price -- and whether another bidder emerges.

Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

NCAA football: Rhoads sticking with same philosophy as ISU looks to build off bowl win (with video)

Posted: 29 Jul 2010 01:01 PM PDT

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• VIDEO: Rhoads press conference

Review: Too much technology bad for self, society

Posted: 29 Jul 2010 10:52 PM PDT

``Hamlet's BlackBerry: A Practical Philosophy for Building a Good Life in the Digital Age'' (Harper, $24.99), by William Powers :: Back in the 1800s, Henry David Thoreau wrote that the man who constantly and desperately keeps going to the post office to check for correspondence from others ``has not heard from himself in a long while.''

``Hamlet's BlackBerry'' argues that the same can be said these days for those who are doing the modern equivalent: incessantly checking e-mail, Facebook, Twitter and the like.

``Of the two mental worlds everyone inhabits, the inner and the outer, the latter increasingly rules,'' writes author William Powers. ``We're like so many pinballs bouncing around a world of blinking lights and buzzers. There's lots of movement and noise, but it doesn't add up to much.''

Powers extols the benefits of solitude and the dangers of external validation. (``Who's read my latest post? Are there any comments on my comments? Who's paying attention to me now?'')

 While recognizing that technology has made tasks like paying bills much easier and faster, Powers disputes the notion that it has made us more efficient. By interrupting our work to check our inboxes throughout the day, we're actually becoming less productive because of the time it takes to refocus on the task at hand. Powers cites a study that found workers spending more than a quarter of their day managing distractions, adding up to $900 billion in economic loss in 2009.

Powers looks to previous eras of dramatic change and draws lessons on how to maintain balance. His own household follows an Internet Sabbath on weekends, an experience that they started out dreading but now welcome as a break from always being connected. ``Hamlet's BlackBerry'' contains nuggets of thought-provoking content, but unfortunately readers have to wade through several lecturing passages - and endure a scattered focus - to find them.

The following are comments from the readers. In no way do they represent the view of www.indianagazette.com.

Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.
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