The reason is unusual and too technical for most people to understand, that includes most journalists that cover business and political news.

As one with the understanding of that highly technical professional sector, I will break down the technicality in the Sanofi strategy for easy understanding and explain why the misunderstanding or misreporting occurred.

In the business world covered by economy/ business-reporting journalists, everything boils down to profit. It can be a real struggle indeed for the journalists to understand the priority of Sanofi. If you add the unpatriotic politics of disinformation then you have a bigger problem to convince those who yearn for only bad news about our country Nigeria.

Already, there are twists to the new Sanofi model and it is necessary to understand why it has absolutely nothing to do with Nigeria or any other country but Sanofi's medium and long term strategy to sacrifice profit for now and focus on research and development of new drug molecules.

If after reading the report below and you are still not clear, please feel free to ask questions. If you understand, what do you think about their new model?

Regards.

Sanofi CEO defends company’s move to abandon profit guidance and boost research


Sanofi CEO Paul Hudson on Wednesday defended his company’s recent moves to abandon future profit guidance and up its investment in its own research programs, arguing that the dramatically negative market response didn’t reflect the potential rewards that could stem from the plan.

“Would I have liked the stock market reaction to be more generous? Of course,” Hudson said at a Financial Times event in London. “But this is a long-term game, and if you’re trying to deliver long-term value, you try not to make too many short-term decisions.”

Sanofi unveiled its R& D plans late last month as it announced its third-quarter performance and said that it was spinning out its consumer health division.

As the company said it was going to spend more money on research, it also withdrew earnings outlooks for 2025. Company executives have argued that this was the moment — when Sanofi has a strong pipeline and isn’t facing patent expirations for years — to increase its R& D resources, even at the expense of short-term profits.

About Sanofi

Sanofi S.A. is a French multinational pharmaceutical and healthcare company headquartered in Paris, France. Sanofi is present in about 100 countries, listed on EURONEXT: SAN and NASDAQ: SNY.


https://www.statnews.com/2023/11/08/sanofi-ceo-defends-companys-move-to-abandon-profit-guidance-and-boost-research/
Mynd44 nlfpmod

What is Research and Development (R& D) in the Pharmaceutical industry?

Pharmaceutical Research and Development (R& D) is a critical process of discovering new active pharmaceutical molecules that cater to human diseases.

The Institute of Medicine, 2007, refers to Pharmaceutical R& D as the pharmaceutical research and development of new medicines.

The process begins with understanding the disease and selecting a target (usually a receptor site on a cell) that can potentially be affected by a drug molecule.

The process usually takes long time to complete, from discovery and isolation of the molecule of the Active Pharmaceutical Ingredient (API), conduct of clinical trial phases , filing for approval and getting to a successful approval stage, release of the patented pharmaceutical product to the market can take between10 to 15 years.

The process is very expensive, the London School of Hygiene & Tropical Medicine estimated that the median cost of bringing a new drug to market is $985 million, and the average cost is $1.3 billion. It is mostly big pharmas like Sanofi that play in pharmaceutical R& D field, and it's usually a huge drain on their human and financial resources.

Pharmaceutical R& D is equally very lucrative when the drug produced from the process becomes a phenomenal commercial success and remarkably improves the healthcare of humanity. The pharmaceutical company is incentivised with exclusive right to manufacture and market the new medicine as the innovator brand owner for up to 10 years like Pfizer's Sildenafil citrate of Viagra popularly used for treating erectile dysfunction in men.

Pharma R& D involves multidisciplinary teams across the spectrum of healthcare and volunteers to participate in the trials. If during post approval phase of the drug, there's an unintended adverse reaction or life-threatening side effect seen in larger population size, the approval may be suspended or withdrawn completely. All the resources running into billions of dollars may be lost! High risk but high rewards for success too.

Below is the press release by Sanofi late last month unveiling its new research and development (R& D)

Press Release: Sanofi Enters Next Chapter of Play to Win Strategy
October 27, 2023


Increases investments in its pipeline to fully realize long-term growth potential, bolstered by successful launches and R& D progress.
Launches strategic cost initiatives, with most of the savings to be reallocated to fund innovation and growth drivers.

Announces intention to separate the Consumer Healthcare Business at the earliest in Q4 2024 via the creation of a publicly listed entity headquartered in France.
Reiterates capital allocation policy and 2023 Business EPS growth target, and provides preliminary 2024 and 2025 outlook.

Paris, October 27, 2023. Sanofi today provided a comprehensive update regarding its Play to Win strategy. This strategy continues to focus on the critical goals of executing transformative medicine and vaccines launches, driving agile and efficient resource deployment and enhancing R& D productivity.

To that end, Sanofi announced plans to increase its R& D investments to fully realize its pipeline potential, drive long-term growth and enhance shareholder value. The Company also announced its intention to separate its Consumer Healthcare Business enabling greater management focus and resource allocation to the needs of the Biopharma business, where value-creating opportunities and longer-term operational levers have been identified to support the accelerated R& D investments. Sanofi reiterates its financial guidance for 2023 and provides a preliminary outlook for 2024 and 2025 that reflects this new chapter of its strategy.

Paul Hudson
Chief Executive Officer, Sanofi
“We have made tremendous progress on our Play to Win strategy by bringing new and transformative products to market and building an industry-leading immunology pipeline, evidenced by our recent, strong flow of positive R& D data readouts. In this new chapter of our strategy, we are deepening our investment in R& D, taking steps toward becoming a pure play biopharma company, and further optimizing our cost structure. This will help us accelerate innovation and strengthen our growth drivers, while ensuring long-term profitability and enhancing shareholder value. We are excited to build on the success of our strategy and confident in the long-term value our investments will generate for all Sanofi stakeholders.”

Play to Win Achievements Since 2019
Sanofi’s multi-year Play to Win strategy, which focused on growth, innovation, and efficiency, has positioned Sanofi for long-term success and achieved significant progress since 2019, including:

Achieving 13 consecutive quarters of growth
Successfully scaling Dupixent® to be among the world’s leading medicines with Q3 2023 annualized sales nearing €11 billion
Building a high-growth Vaccines business, which delivered mid- to high-single digit sales growth since 2018, with at least five new programs expected to enter Phase 3 by 2025
Successfully launching six new molecular entities in the last two years (Xenpozyme®, Nexviazyme®, Enjaymo®, ALTUVIIIO®, TZIELD® and Beyfortus®)
Developing an industry-leading immunology and strong neuro-inflammation pipeline, with currently 7 assets in mid- to late-stage development, each with a peak sales potential of at least €2 to €5 billion (itepekimab, tolebrutinib, amlitelimab, frexalimab, rilzabrutinib, SAR443765 (IL13/TSLP), SAR441566 (oral TNFi))

Executing a €2.7 billion cost savings plan to reinvest in the Company’s growth drivers
Investing in over 25 value-creating business development and M&A deals to further strengthen Sanofi’s pipeline
Streamlining Consumer Healthcare product portfolio to focus on priority brands
Significantly improving BOI4 and free cash flow

Strengthening the Pipeline through Increased R& D Investment
Sanofi’s strategic mission is to transform the practice of medicine through breakthrough science that improves people’s lives. To that end, the Company is accelerating its R& D investments to deliver high-value innovation.

These further investments will strengthen and sustain the Company’s long-term trajectory of profitable growth by fueling existing or new clinical development.

As previously announced, Sanofi will host an R& D Day for investors in New York City on December 7, 2023, where the Company will provide further insights into its pipeline and new growth avenues. The meeting will include presentations from Sanofi’s new Head of R& D, Houman Ashrafian, as well as key members from the research and development teams.

Houman Ashrafian
Head of Research and Development, Sanofi
“This is an exciting and important moment for Sanofi’s R& D journey, as we double down on our investments from a position of strength in order to unlock our pipeline’s full potential.
Our investments will follow Sanofi’s strategy of transforming medicine through breakthrough science, enabling greater access to medicines and vaccines that benefit the patients and communities we serve. We are committed to investing in innovation with discipline, and we will reallocate resources, further prioritizing first and or best in class medicines to help fund our future growth. We look forward to discussing our plan further with investors at our upcoming R& D Day, where we will dig deeper into the compelling science underpinning this opportunity.”

Strategic Cost Initiatives
Sanofi is announcing new steps to further its ongoing effort to improve its cost structure, launching efficiency initiatives across the Biopharma business that will free operational resources to support the accelerated R& D investments and unlock value-creation opportunities. This will include prioritizing its investments in R& D and modernizing its approach to commercial delivery. Sanofi is targeting savings of a total of up to €2 billion from 2024 to the end of 2025, of which most will be reallocated to fund innovation and growth drivers.

Intention to Separate the Consumer Healthcare Business
Following the announcement in December 2019 of the creation of a standalone Global Business Unit, Sanofi’s Consumer Healthcare (“CHC”) has grown into a leading consumer healthcare platform with a presence in 150 countries and over 11,000 employees, dedicated resources in R& D, manufacturing, information technology as well as its distinct sustainability roadmap.

Sanofi announces its intention to separate the CHC Business as it increases its focus on innovative medicines and vaccines. The intended separation will seek to create two entities, each better equipped to pursue its own business strategy, resourcing and capital allocation and enabling each to focus on long-term growth in its respective markets. Sanofi believes that the separation will unlock further opportunities for CHC to leverage its portfolio of leading brands and continue to drive growth and shareholder value.


Julie van Ongevalle
Executive Vice President, Consumer Healthcare Sanofi
“We have achieved significant milestones at Sanofi Consumer Healthcare since we embarked on our journey to become a standalone Global Business Unit within Sanofi. We have adapted our business to the evolving needs of the Consumer Healthcare sector, offered a streamlined yet diverse brand portfolio of science-based products and solutions and achieved the B Corp accreditation as the first large consumer healthcare business in North America. The CHC teams and I look forward to becoming a standalone global leader in the attractive and growing consumer health market, with increased agility and flexibility to grow our portfolio of brands and further address our customers’ needs across categories.”

Sanofi is reviewing potential separation scenarios, but believes that the most likely path would be through a capital markets transaction, by creating a listed entity headquartered in France. The timing is driven by the desire to maximize value creation and reward Sanofi shareholders. Subject to market conditions, the separation could be achieved at the earliest in Q4 2024, following consultation with social partners. Further details will be provided at a later date.

2023 Guidance and Preliminary 2024 and 2025 Outlook1

Sanofi reiterates its 2023 guidance of mid-single digit2 Business EPS3 growth at constant exchange rates.

As a result of changes to global tax regulations, Sanofi’s effective tax rate is expected to increase from 19% in 2023 to 21% in 2024. Due to the increased R& D investment, Sanofi expects 2024 Business EPS to remain roughly stable to 2023 levels excluding the impact of the expected tax rate change, and therefore decline low-single digits including the higher expected tax rate.

In 2025, Sanofi expects a strong rebound in business EPS growth, driven by continued sales growth supported by its leading franchises, the full benefit from planned efficiency initiatives, and its expectation of relatively stable R& D expenses year on year.

Given Sanofi’s decision to support the full realization of its pipeline’s long-term potential, its continued investment around the new launches, as well as pricing headwinds in General Medicines, the Company will no longer target a 32% BOI4 margin for 2025 while maintaining a focus on long-term profitability.

The company reiterates its goal to generate over €22 billion in sales in immunology, and over €10 billion in sales in vaccines by 2030.

Capital Allocation Reaffirmed
The Company’s capital allocation policy remains unchanged. Sanofi expects to maintain a gradually growing dividend, consistent with its historical dividend policy.

Q3 2023 Earnings Call & Upcoming R& D Day Information
Third quarter 2023 results and the announcements above will be discussed by management during a conference call with the financial community today. The presentation will be followed by a Q&A session. The link to the audio webcast and the corresponding presentation can be found on the Investors Relations section of Sanofi corporate website: www.sanofi.com/investors. A replay will be available shortly after the live webcast.

Sanofi will host an R& D Day for investors and analysts in New York City on December 7, 2023. A live webcast will be available for those unable to attend in person. Event registration details will be forthcoming.

https://www.sanofi.com/en/media-room/press-releases/2023/2023-10-27-05-30-00-2768148

In conclusion, the change in the model adopted by Sanofi has nothing to do with Nigeria or our local economic policies. It's for strategic reasons by Sanofi to re-allocate its resources towards long term priority of discovering new drugs.
https://businesspost.ng/featureoped/why-sanofi-is-not-exiting-nigeria-changing-its-global-business-model/
Mynd44 nlfpmod

The truth is that the negative market factors are as a result of the constricting effects of the unfeasible economic policies of the seating government that is choking the life out of Sanofi thereby necessitating a change from outright production of essential drugs into research.

No sane investor will want to put his money in an economy being administered by incompetent or corrupt political leadership, forex crisis, lack of short or long term economic buffering policies, or strong economic think tank.

This is because, as a reputable pharmaceutical organisation, the production of drugs and research are active ongoing processes with macro-economic companies. So for them to jettison one for the other means something is not adding up. After all, others like GSK, have long also indicated interest to exit the Nigerian Market based on the same reason.

Racoon:
The truth is that the negative market factors are as a result of the constricting effects of the unfeasible economic policies of the seating government that is choking the life out of Sanofi thereby necessitating a change from outright production of essential drugs into research.

No sane investor will want to put his money in an economy being administered by incompetent or corrupt political leadership, forex crisis, lack of short or long term economic buffering policies, or strong economic think tank.

This is because, as a reputable pharmaceutical organisation, the production of drugs and research are active ongoing processes with macro-economic companies. So for them to jettison one for the other means something is not adding up. After all, others like GSK, have long also indicated interest to exit the Nigerian Market based on the same reason.

Smh. Just replace Nigeria in this your inaccurate lamentation, with each name of the about 100 different countries where Sanofi operates, read what Sanofi explained to the world in black and white as its reason and you should realize that it can not be Sanofi that's lying but you.

This is not politics where you lie and cook up conjectures o.

If you are from a professional background, you shouldn't struggle to understand that each of the steps taken by Sanofi so far are guided by regulations and regulators. Any misstep by Sanofi can land it in very serious legal problems. This is a high stakes strategy and Sanofi would have first informed all the regulators.

I have only tried to educate you but you still don't understand. If it's a Nigerian issue, it will not affect each of the about 100 countries it operates.

If after this my explanation you still don't get it, I will still understand with you why you find it difficult to comprehend the point Sanofi is making that it has nothing to do with Nigeria or any other country.

Great post. This is really good. Thanks for sharing this information. Keep sharing.

Sanofi that has been operating in nigeria for donkey years, even struggl3d to stay afloat during buhari's terrible regime . . .

Only to throw in the towel now and op @ mannabbq wants to now explain on behalf of Sanofi why they say dem no dey do again under Tinubu's wonderful regime.

Don't worry, you've just started with Sanofi abi? What of the other companies that have shifted base of operations out of Nigeria since tinubu climbed aso rock? Why haven't you researched and presented their own reasons too?