Sanofi-Aventis SA (NYSE: SNY; Euronext: SAN), one of the world's largest pharmaceutical companies, has authorized Sanofi-Aventis Israel Ltd. to acquire a consumer healthcare products company for several tens of millions of dollars. Sanofi-Aventis Israel general manager Ronnie Birnboim told "Globes" that he has already examined the market and met most of the companies in the industry, but that he was open to more offers.
Birnboim said that Sanofi was already in advanced talks with one company, but that it was still looking. He added, "We won't necessarily be satisfied with just one company in the industry."
The acquired company will become part of Sanofi's consumer healthcare division. "Sanofi Consumer Healthcare markets products directly to consumers, including nutritional supplements, dermocosmetics (cosmetics with dermatology active pharmaceutical ingredients), lifestyle products such as diet medications, anti-smoking products, and non-prescription drugs for coughs, colds, and allergies," says Birnboim.
"In these fields, the battle in generics, and competing products in general, is over brands. It is therefore harder to import to Israel consumer healthcare products from other countries because the marketing budget needed for an unknown brand to gain a foothold is high. The acquisition of an Israeli marketing platform with known brands in these fields will make it easier for Sanofi to import foreign products and market them to local consumers."
Birnboim says that pharmaceutical companies are returning to the consumer healthcare market, after cutting back on this business a decade ago because the development of new pharmaceuticals has become more challenging and because there is pressure on prices. Unlike other companies, Sanofi has not had a patent cliff problem (the expiration of many drug patents at the same time, affecting a company's business), and it too has rediscovered the potential and stability of consumer healthcare products.
"Globes": If you acquire a company with successful products, will you market them in other countries under a different label?
Birnboim: "Maybe, depending on the success in Israel."
Israel is a source of innovation
Birnboim has worked for Sanofi-Aventis for 28 years and been general manager of Sanofi-Aventis Israel since 2004. "Sanofi's interest in Israel as a source of innovation has grown in recent years," he says. "This is mostly because of a visit to Israel by CEO Christopher Viehbacher in 2009. During the visit, he met President Shimon Peres, who involved the company in a water investment. This was a joint project by Al Quds University and the Technion to purify treated wastewater of remaining pharmaceuticals."
"Viehbacher opened the Biomed Conference and met with many companies, and the company's ties with Israel have subsequently grown stronger. Since the visit, the company has kept a team of scouts at its Israeli office, and a group that visits Israel once or twice a year to meet life sciences companies."
Although no life sciences company has yet been acquired, Birnboim says that the matter is still under review. Companies of Sanofi-Aventis's size to not write checks in haste, but it has invested $2 million in Hadasit Bio Holdings Ltd. (TASE:HDST; Bulletin Board: HADSY) portfolio company KAHR Medical Ltd. and it is contact with the technology commercialization companies of all the universities.
Sanofi-Aventis is most interested in oncology, diabetes, general biotechnology, immunology, veterinary medicine, and consumer healthcare companies. "The company does not rule out investing in interesting new products, including medical devices and medical computer products that are relevant to its fields of business. It usually prefers to buy products under development, rather than technology platforms," says Birnboim.
Published by Globes [online], Israel business news - www.globes-online.com - on November 15, 2012
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