Sanofi is an amalgamation of several pharmaceutical companies that came together to offer the best healthcare solutions to the world. Let’s take a look at Sanofi’s exciting journey.
A highly reputed and renowned name in the pharmaceutical industry, Sanofi has an illustrious history of innovation that spans over a hundred years.
Sanofi is a reliable health companion for people around the globe facing health challenges. It offers an extensive range of healthcare solutions covering major therapeutic areas and responsibly caters to diverse medical needs.
Headquartered in Paris, Sanofi deals with the manufacturing and marketing of pharmaceutical drugs, including prescription as well as over-the-counter medication.
To understand where Sanofi stands in the global market today, let’s take a look at its recent stats:
Sanofi has a unique growth journey encompassing a series of well-planned mergers and acquisitions that have resulted in it becoming a global leader in healthcare. Let’s rewind the clock and review how Sanofi was created and how it became one of the top multinational pharmaceutical corporations.
Sanofi’s history is actually the combined history of all the companies that joined the original Sanofi, such as Synthélabo, Hoechst, and Rhône-Poulenc Rorer.
Each company had its own illustrious history of groundbreaking contributions to the field of medicinal research and healthcare. Therefore, it is essential to know their history as well, and understand what caused all of them to join forces.
Synthélabo came into existence in 1970 as the result of the merger between two French pharmaceutical laboratories - the Laboratoires Dausse and Laboratoires Robert & Carrière.
The Laboratoires Dausse was founded in 1834 to manufacture plant extracts that were to be used by pharmacies to create various medications. Conversely, the Laboratoires Robert & Carrière was founded in 1899 and went on to develop a name for itself in the field of cardiovascular therapy.
The merger proved to be a success in diversifying the company’s business portfolio and consolidating its expertise across various therapeutic areas.
In 1973, L’Oréal - the renowned French cosmetics group - acquired the majority of Synthélabo’s share capital. L'Oréal had set its sights on pursuing the pharmaceutical field, and its purchase of Synthélabo was in line with this ambition.
Rhône-Poulenc Rorer traces its origins back to 19th century France when in 1801, a dye manufacturing business was formed under the name Maison Debai-Extraits Tintoriaux.
In 1895, the business was formally established as Société Chimique des Usines du Rhône (Chemical Factories of Rhône). In 1928, it merged with the Établissements Poulenc Frères (Poulenc Brothers) to create Rhône-Poulenc.
Poulenc Frères was a pharmaceutical house established by Camille Poulenc, an illustrious figure in the French pharmaceutical industry who had also worked with Pierre and Marie Curie - the renowned French physicists.
Although the joint venture between the two companies worked extensively in the chemical industry, it was popularly known among the French for its drug products.
In 1990, Rhône-Poulenc merged with the pharmaceutical company, Rorer, to form one of its most integral subsidiaries - Rhône-Poulenc Rorer. In 1995, this U.S.-based subsidiary was responsible for acquiring a major British drug manufacturing company called Fisons.
These series of mergers were crucial in bringing together some of the most prominent and prestigious names in the industry.
Hoechst was a dye manufacturing company created by a group of chemists, salespeople, and workers in 1863. The company was named after the German town Höchst where it was located.
Although the company began as a chemical business, it soon transitioned into the field of life sciences. In 1999, Rhône-Poulenc Rorer and Hoechst merged with each other to form Aventis. This was a noteworthy development as it combined two major rival companies from France and Germany respectively into one formidable entity.
Their combined expertise and history of pharmaceutical operations provided Aventis a suitable platform for establishing itself as a major player in the industry from the very beginning. Aventis formed its own share of partnerships and collaborated with American companies on multiple ventures in the field of biotechnology.
There are several ways for a business to expand its portfolio. Partnering with firms from diverse fields is one of the quickest and most reliable ones. Period.
Synthélabo, Hoechst, and Rhône-Poulenc Rorer all three had a long history of forming critical partnerships and absorbing the right companies to strengthen their existing businesses.
It helped in the process of portfolio diversification and expanding expertise. The strategy helped ensure that the companies were not putting all of their eggs in one basket and were instead pursuing different avenues of growth. This worked wonders and led to exponential growth.
The Sanofi we see today underwent numerous transformations before it became the powerhouse it is today. The name ‘Sanofi’ can be traced back to 1973, when a French oil company decided to diversify its portfolio.
Originally, Sanofi was a subsidiary of the French state-owned oil company, Elf Aquitaine.
Elf Aquitaine sought to diversify its portfolio in hopes of increasing the scope of its business. In doing so, it laid the foundations for a state enterprise capable of competing on an international level in the healthcare industry.
Various cosmetic, healthcare, and animal nutrition firms banded together, and, in 1973, Sanofi was formed from this unusual combination.
Over the years, Sanofi grew from a decent enterprise into France’s second-largest pharmaceutical company. The company’s incredible success has been attributed to René Sautier - the man who proposed this diversification project to the general management of Elf Aquitaine in the first place.
René Sautier was the French entrepreneur who was put in charge of running the Sanofi group. When Sautier assumed responsibility for Sanofi, the company was just a small start-up with merely 10 employees and 500 million francs at its disposal.
Initially, Sautier was subordinate to the president of Elf Aquitaine, but the company soon underwent a decentralization program that restructured it into five autonomous units. Due to this restructuring, Sautier was granted a considerable measure of independence in how he ran the company. His business acumen was principally responsible for Sanofi's subsequent success.
In 1979, Sanofi concentrated its pharmaceutical activities under a single organization to consolidate its research activities and enhance overseas market penetration.
The tactic served to direct the company’s focus on a specific objective - i.e., strengthening its pharmaceutical operations and thereby ensuring competitiveness in the international market.
As a result, Sanofi absorbed three companies that were previously affiliated with it - namely, Labaz, Parkour, and Galor. The strategy proved to be immensely successful and beneficial even years down the line as Sanofi was reporting unprecedented profits by the mid-1980s.
In 1980, Sanofi acquired the Clin-Midy group, which was created as a result of the merger between the Laboratories Midy, a pharmaceutical company formed by a family of pharmacists in 1718, and Clin Byla - a company originally founded by the renowned French entrepreneur Leon Comar.
The merger expanded Sanofi’s holdings and significantly increased its R&D budget. The company also grew in size by a staggering 50%. These developments firmly established Sanofi amongst the ranks of the leading pharmaceutical companies in France.
Sanofi was committed to branching out into the global market, which is why it concentrated on securing access to the world’s two most important markets: the United States and Japan. Doing so increased the company’s international sales by an astounding 275%, and nearly half of its consolidated revenues were attributed to its overseas activities.
Recognizing the importance of further cementing its presence in foreign markets, Sanofi formed a joint subsidiary with American Home Products in 1981. Similarly, Sanofi formed another joint subsidiary with the Japanese groups Meiji-Seika-Kaisha and Taisho.
These partnerships proved to be markedly successful as their joint operations yielded around $104 million. Even more noteworthy is the fact that this amount was generated from the sale of just three drugs.
Not only did Sanofi solidify its pharmaceutical business, but it was also able to triple its foreign sales of cosmetic products. Thus, the expansion of its pharmaceutical operations created opportunities for improving other businesses as well.
After its formation, Sanofi focused on acquiring several smaller pharmaceutical companies, such as Clin-Midy and Labaz, Parkour, and Galor. This allowed the firm to solidify its position in the local market and establish a firm base to step into the foreign market.
Here the company again formed joint subsidiaries with the American and Japanese companies, which yielded the company significant revenues and allowed it to become a dominant international firm in very little time.
Overall, Sanofi realized that instead of starting from scratch and facing several constraints as well as competition, combining various businesses could accelerate its growth - and it did just that quite successfully.
Sanofi was off to a great start in its initial years, but it was still nowhere near to developing into the industry giant that it is today. In fact, it would still be a few more decades before the fated mergers and acquisitions that gave rise to the Sanofi of today came into place.
Nevertheless, throughout the late 1900s, Sanofi continued its upward trajectory by developing innovative healthcare solutions and forming successful partnerships with other businesses.
Initially, Sanofi had around five laboratories spread across France, with some facilities located in Brussels and Milan as well, where Sanofi’s pharmaceutical research was taking place.
Sanofi knew that accelerating its research activities was the only way to provide the most effective medical treatments worldwide to people suffering from different ailments. Thus, in 1982, Sanofi increased its R&D expenditure by 34% to facilitate the production of multiple drugs that could be profitable for the company.
During this time, Sanofi had several projects in different phases of production; some were undergoing clinical testing while others were still undergoing research. The products that Sanofi was researching included a psychotropic drug and an anticonvulsant drug. At the same time, it was conducting trials on an antiarrhythmic, a third-generation cephalosporin, and a treatment for certain kinds of cancer.
Even early on, Sanofi decided to address treatment options for a diverse range of medical conditions instead of specializing in a particular therapeutic area. Another significant milestone for the company’s R&D department was the inauguration of a biotechnology center in Labége in 1983. The center was the largest of its kind in France and highlighted Sanofi’s growing status.
Sanofi was interested in forming the right partnerships and accessing the right businesses. In 1983, to gain access to a new range of important pharmaceuticals, Sanofi acquired Choay - a pharmaceutical company specializing in venous thrombosis.
Although by 1985, Sanofi was reporting significantly high sales figures, Sautier believed that Europe's weak market and price controls on pharmaceuticals in the domestic market were hindering the company’s potential.
Therefore, Sautier commenced an internationalization program to try and recoup investments in foreign markets. Once again, the U.S. and Japan were identified as critical targets for market penetration. Consequently, Sanofi successfully acquired the U.S.-based Dairyland Food Laboratories and Dahlgren, a dairy company and crop seed producer, respectively.
Both these acquisitions were crucial because they both operated successful biotechnology programs. Sanofi generated a considerable amount of sales revenue through products developed from these technologies.
Sanofi’s efforts to boost its R&D operations paid off in the form of successful developments of innovative pharmaceutical drugs and novel healthcare solutions.
In 1985, Sanofi's Choay subsidiary developed the first low molecular weight heparin, which was a major development in the prevention of thromboembolic diseases. Meanwhile, another of Sanofi's subsidiaries, Diagnostics Pasteur (a medical equipment firm), launched the Elavia test to detect antibodies for LAV - a virus associated with AIDS.
The development of these treatments reinforced Sanofi’s standing as an innovator of pharmaceuticals and healthcare options. Although Sanofi was engaged in various business activities at that point, their work on healthcare products was what ultimately led to the company’s long-term growth.
Sanofi pursued growth through various avenues over the years. Instead of focusing solely on either enhancing R&D or acquiring other businesses, Sanofi decided to do both at the same time.
The effect of having such a strategy was that Sanofi was covering all of its bases. It was improving its products through R&D and increasing its capacity through strategic partnerships and collaboration.
The combined effect of these tactics was that Sanofi grew to a great extent in a limited time and offered a range of new quality products to a much larger market.
Until the 1990s, the legacies of all the companies that comprise the Sanofi of today had been disconnected from each other.
However, it was the ‘90s that brought it all together. In this period, the enriched histories and contributions of all component companies converged together to form a single narrative that encapsulates and continues to extend, Sanofi’s journey to date.
Entering the 1990s, Sanofi was clear on its objective: It had to center its core business in the pharmaceuticals industry. The purpose of Sanofi had been to cater to various therapeutics areas, as this meant they had to up their game now. Sanofi had to further solidify its presence in the global drug industry.
Consequently, Sanofi renewed its interest in making the necessary acquisitions. Little did it know, the company would achieve its big break just a year later. In 1991, Sanofi formed a strategic partnership with an American drug company - Sterling Winthrop (a subsidiary of Kodak) - and this would change the game for it, forever.
The partnership was formed on unusually cordial terms. There was no exchange of money, and the joint enterprise was headed by a team of executives from both companies. Whether it was due to these unique terms, or otherwise, the alliance proved instrumental in providing Sanofi a much-desired foothold in the profitable North American market.
The partnership yielded positive results in various forms, e.g., the combined spending of the two companies exceeded an annual commitment of $500 million.
By 1992, their joint venture claimed a spot amongst the top 20 in the global pharmaceuticals industry. In 1994, Kodak even decided to sell Sterling Winthrop to Sanofi for $1.68 billion.
Finally, Sanofi had managed to bag its prize in the pharmaceuticals game by becoming the primary owner of Sterling Winthrop and was now pursuing its purpose in full swing.
It is important to know that even in the ‘90s, Sanofi wasn’t considerably large. In fact, in 1996, the small size of Sanofi was the hindrance the company faced in claiming a position as one of the industry’s greats.
Hence, it decided to expand its sales and distribution networks with particular emphasis on the North American region. For this purpose, Sanofi acquired the Bock Pharmacal Company in July of 1996.
Unfortunately, unlike the previous partnership, this acquisition was not enough to launch Sanofi to the top; instead, the highly competitive industry put Sanofi itself at risk of a takeover.
The company’s next big break came in the form of a monumental merger with Synthélabo in 1999. It seemed the ‘90s were a game of you win some, you lose some for Sanofi.
Thereafter, the new company would be known as Sanofi-Synthélabo. Both companies’ product portfolio, R&D projects, and geographical presence had incredible complementarity, which made the integration all the more suitable.
The mutual objective of Elf Aquitaine and L’Oréal was to create an impressive pharmaceuticals group that would become a leading player in the international pharmaceuticals industry.
The merger allowed Sanofi to properly reorient itself towards the pharmaceuticals business as it had intended for a while now. Consequently, the company got rid of several of its other businesses such as beauty, diagnostics, animal healthcare, custom chemicals, as well as two medical equipment businesses.
Finally, Sanofi could just focus on expanding its pharmaceuticals streak. This divesting of business units was also prompted by the need to reinforce research activities and enhance overseas market penetration.
By breaking free of its other domains, unrelated to pharmaceuticals, Sanofi managed to save up and retain cash flow to expand its research budget for pharma and drug trials. Consequently, the pharmaceutical division began prospering.
Soon enough, in the 2000s, Sanofi-Synthélabo had launched several drugs, of which three turned into best-sellers and generated extensive profits. The new company was setting a precedent for a medium-sized company’s self-sustainability in a highly competitive industry.
Even though Sanofi-Synthélabo was a competent business in its own right, it still needed to partner with larger pharmaceutical companies to continue introducing new products in major markets like the U.S.
Therefore, in 2004, Sanofi-Synthélabo made a bid to take over Aventis. The negotiations for the takeover were stretched across three months but eventually came to a close with Aventis accepting a bid of €54.5 Billion.
The company undertook a new name to mark its transition into a new order of business. Thereafter. Sanofi-Aventis came into existence.
However, in May of 2011, the company made the significant decision to drop “Aventis” from its name. The reason cited for this decision was that the name was difficult to pronounce in some countries such as China. Alas, what couldn’t be said would not be bought - or so the usual thought does.
Thus after almost a hundred years, Sanofi went back to its original name. However, this did not mean that this was the Sanofi of the 20th century. The company had undergone a massive transformation over the years, one that had made it completely different from the company it was at the beginning.
Setting clear targets helps the company focus and organize the resources to achieve the desired results effectively and efficiently.
Sanofi had identified its objective to become a world-class pharmaceuticals business, and it used all the resources at its disposal to achieve that objective. All its subsequent actions and crucial decisions were made with the end goal in sight.
By refocusing its efforts towards a set target, Sanofi was able to let go of the extra burden of its unwanted business units and use the money to finance acquisitions that would help achieve its goals.
Sanofi has come a long way since it was created. It went through several phases of expansion and development as it established itself in the healthcare industry. Over the years, the company formed various subsidiaries, which in turn grew their own roots in the field of health sciences. The Sanofi of today is an aggregate of all its different business segments.
The merger between Sanofi-Synthélabo and Aventis also led to the formation of Sanofi Pasteur - a subsidiary dedicated to the production of vaccines.
Sanofi Pasteur has developed vaccinations for various medical conditions such as tetanus, hepatitis, polio, and even influenza. Meanwhile, Sanofi-Aventis has continued its tradition of partnering with and acquiring various businesses over the years.
Keeping in line with this tradition, in April 2011, Sanofi-Aventis made the momentous move to acquire Genzyme - an American biotechnology company. This was to be Sanofi’s step towards the world of biotech - i.e., a step into the future of R&D and pharmaceuticals.
Genzyme started in 1981 as a small start-up in Boston that eventually grew to become one of America’s best companies in the industry. It was even awarded the National Medal of Technology in 2005 - the highest honor bestowed to America’s leading innovators.
Since its acquisition, Genzyme has operated as a subsidiary of Sanofi. However, it retained its name. This was due to Genzyme’s vast and loyal consumer base. Sanofi realized it could cash in on the goodwill and benefits from the reach and resources of this global pharmaceutical corporation, and it certainly proved the right way to go.
Other subsidiaries of Sanofi include:
The Sanofi Pasteur unit has helped vaccinate over half a billion people worldwide. It partners with the public health and scientific communities to enhance access to life-saving vaccines and increase the number of vaccinated individuals across the globe.
We can trace Sanofi Pasteur’s heritage back to the achievements of Louis Pasteur. Louis Pasteur was a French chemist and microbiologist whose work in the 19th century revolutionized modern science.
He is remembered for treating a man exposed to the rabies virus, the first-ever instance of vaccination against rabies.
Louis Pasteur also founded the Institut Pasteur, which Sanofi Pasteur is still affiliated with to this day. In keeping the vaccination streak and legacy alive, Sanofi Pasteur has been involved in the development of vaccines over the years, having found vaccines against various diseases such as influenza, yellow fever, polio, measles, tetanus, and rabies, among others.
Sanofi Genzyme is the unit responsible for developing treatments and therapeutic solutions for rare diseases, neurology, oncology, rare blood disorders, and immunology. The subsidiary helps people navigate rare and unusual conditions whose diagnosis and treatment are both very difficult. Its efforts are guided by its vision to become a world leader in specialty care.
Sanofi Genzyme's segment for rare diseases is renowned for its work on Lysosomal storage disorders (LSDs), which is a group of rare genetic conditions caused by enzyme deficiencies.
The company’s work in the field of neurology is best encapsulated by its 18 years-long commitment to improving the lives of 2.3 million people across the globe who are afflicted with multiple sclerosis.
In the field of oncology, Sanofi Genzyme plays its part in developing modern treatment options, expanding access to therapies, and providing support resources to patients and their caregivers.
In 2014, Sanofi Genzyme introduced the first innovations in hemophilia management by launching extended half-life factor replacement therapies for people with hemophilia A and B. Moving on, Sanofi Genzyme created its Rare Blood Disorders unit through the acquisition of Bioverativ and Ablynx in 2018.
Sanofi Genzyme is also engaged in exploring potential new medicines and drugs for immunology concerns such as chronic dermatologic, respiratory, and gastrointestinal diseases.
In short, the subsidiary continues to expand its horizons and reach for cures for all sorts of diseases and more.
While Sanofi’s approach to cure discovery and vaccine development has been gradual and steady, the arrival of the COVID-19 pandemic pushed its operations in full throttle. With a clientele that expected much, Sanofi became committed to playing its role in the fight against the COVID-19 - and so it did.
Sanofi is engaged in the development of vaccines for the coronavirus while also contributing to their large-scale manufacturing to ensure that a maximum number of people get vaccinated as soon as possible.
Despite the fact that many variations of the COVID-19 vaccines already exist, the existence of different variants of the virus means that there is always room for improvement. Sanofi has multiple vaccine prototypes under development and announced in September 2021 that it would complete the final stages of its COVID-19 vaccine development in collaboration with GSK.
The company has joined forces with the healthcare industry at large to help mitigate the spread of the virus. It is contributing to the global supply of COVID-19 vaccines by support-manufacturing three vaccines that have already been approved. The three vaccines include the ones developed by Johnson & Johnson, Moderna, and that co-developed by Pfizer and BioNTech.
The pandemic can essentially be considered to be a test of Sanofi’s ability to adapt to critical changes in the world market. Almost overnight, the coronavirus became the most prominent concern across the globe and completely transformed the way that healthcare companies had been operating till now.
The pandemic introduced a sense of urgency with regards to the development of effective treatments. Sanofi rose to the challenge and began working on its COVID-19 vaccine. But when the process did not yield timely results, the company shifted gears and instead decided to start support-manufacturing of already approved vaccines. This ensured that Sanofi was playing its role in the global fight against COVID-19 while it was waiting for a breakthrough in its vaccine development process.
A French pharmaceutical company that has grown to become the 5th largest in the world, Sanofi’s story dates back to the 19th century. However, considering the company’s formal existence wasn’t until 1973, Sanofi’s journey of merely 48 years of being in the market has been nothing short of revolutionary.
In these years, the corporation has entered and conquered the health sectors of cardiovascular diseases, internal medicine, oncology, and especially vaccines; growing to become the world’s leading vaccine developer and manufacturer.
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Continuing the legacies of many and making numerous crucial decisions along the way, the journey of Sanofi is nothing less than inspirational. Here are the key takeaways from the Sanofi story - the one that revolutionized the industry of medicine and vaccines for all time to come.
Long before Sanofi was formed, there were various pharmaceutical and chemical companies operating in different parts of the world.
The ones that got together to form Sanofi shared a common goal: to diversify and enhance their operations. For this purpose, these companies sought businesses specializing in different fields (each other) and they were able to create new products and enter new markets without having to take additional risks, such as building a customer base from scratch.
As a result, the foundation of Sanofi was built upon diverse companies’ collaboration providing the company extensive expertize and market even before it began its operations.
Although Sanofi was initially backed by Elf Aquitaine, it still was a new player in the pharmaceutical industry. But René Sautier, the man in charge of this new company, had a well-planned strategy to help Sanofi grow during this time.
Under him, the company added several smaller companies to its portfolio and formed a larger firm, capable of overseeing competition in the market. This was similar to how Sanofi came into being (through diverse strategic partnerships)
Not only did it enable Sanofi to do well in the local market it also paved the way for successful partnerships in the USA and Japan. Thus, these acquisitions and mergers proved to be a masterstroke, priming the company for long-term growth.
Small companies gradually scaling up can apply one growth strategy at a time. But Sanofi always aimed to be an industry leader which is why they did not rely on one strategy. Instead, they invested in research and development along with continuing their pattern of acquiring or forming partnerships with other businesses.
Resultantly, not only was the company continuously able to develop and improve new products, but it also cemented its position further in international markets. Thus, Sanofi’s growth was not a one-time endeavor. It translated to a sustainable approach to growth that carries the company to this day.
While putting eggs in multiple baskets can appear like spreading risks and diversifying the company portfolio, taking too many roads can also deter the business from its prime focus. The 1990s were the time when Sanofi realized what it really wanted: to enter into the pharmaceuticals industry and leave a lasting mark.
A couple of cuts and major refocusing later, Sanofi had let go of its product lines unrelated to pharma (like beauty, animal healthcare, etc.) and saved up enough to invest in drug research and development.
The mergers and acquisitions that followed also revolved around the same, renewed focus - pharma - and while the road was bumpy with a few losses, the gains were manifold and helped transform Sanofi into the pharmaceutical behemoth it is today.
Whether it be the desire to continue the legacy of Louis Pasteur via Sanofi Pasteur or partner with Genzyme, Sanofi knew it had to understand the scenario and adapt accordingly if it wished to gain success in the pharmaceutical industry.
On one hand, Sanofi had to take the difficult decision of not renaming Genzyme because of its already-established widespread clientele. On the other hand, and very recently, the arrival of the pandemic and other companies beating Sanofi to vaccine development meant Sanofi’s vaccine research had to take a backseat.
However, being fluid and flexible, Sanofi adapted to the situation and refused to fret over naming divisions or halting vaccine research. Instead, the company found a way around it by facilitating the production of already-discovered vaccines - thereby churning the revenue wagon yet again.