Strategy

• To print this page, please use the File menu or press simultaneously ctrl + p keys.
• Send this page

• Increasing innovation in Research & Development
• Adapting our structures to meet the challenges of the future
• Exploring external growth opportunities

However, although these are solid foundations, we, like most of our competitors, are faced with the foreseen competition from generics for some of our major products. Our environment is also subject to cost containment pressures from healthcare authorities, and increased regulatory barriers. Given the significant challenges facing the pharmaceutical industry, we need to develop new platforms for growth. Our response to these challenges is an ambitious one: to deliver sustainable growth, we need to transform ourselves into a diversified global healthcare leader.

This is why we initiated a wide-ranging transformation program at the end of 2008, focusing on three key themes:

Increasing innovation in Research & Development

• At the end of 2008, we began a complete and objective review of our research portfolio, in order to reassess the allocation of resources. This review has already led to a rationalization of our portfolio and will be ongoing in the first half of 2009.
• In the future, we must focus our Research & Development (R&D) strategy on key technologies and diseases to better serve the needs of patients.
• Our internal R&D division needs to be organized to maximize flexibility and innovation, and some of our existing resources in R&D need to be reallocated to external collaborations.
• Finally, we will redefine the decision-making process in R&D so that new commercial potential and the scope for value creation are better integrated into our development choices.
• As part of this transformation and in response to the new industry environment, we have created two new positions: a Chief Medical Officer, who will closely monitor the benefit/risk balance in both marketed products and those in development; and a Scientific Advisor, who will contribute to R&D decision-making processes relating to both our pipeline and our strategy, and in particular the creation of alliances.

Adapting our structures to meet the challenges of the future

• We intend to adapt our operating model, currently too focused on our traditional major markets, to reflect the diversity of our activities and our geographical reach.
• This means tailoring our strategy, structure and offering to each region’s needs, so as to deliver the most appropriate solution to each patient.
• It also means combining our various activities, so as to address our customers’ needs more thoroughly and take best advantage of all local growth opportunities.
• Anticipating future changes in volumes and analyzing growth opportunities will enable us to realign our industrial capacity.
• Simplifying our organizational structures and operational processes will translate into a reduction of our general and administrative costs.

Exploring external growth opportunities

• Business development must be perfectly integrated in our overall strategy, and translate into disciplined acquisitions and alliances that build or strengthen the platforms for long-term growth that will create value for our shareholders. We have already taken the first steps in this direction through our alliance with Regeneron Pharmaceuticals, Inc (Regeneron), our acquisitions of Acambis Plc (Acambis), Symbion CP Holdings Pty Ltd (Symbion Consumer), and Zentiva N.V. (Zentiva).
• We are encouraging business development initiatives within operations in order to reinforce our regional approach.
• Our external research collaborations will be broadened to bring maximum creativity to R&D and hence deliver innovation to patients.
• The position of Chief Strategic Officer has been created at Executive Committee level to achieve this integrated approach to strategy and business development.

This transformation program has already led to the rollout of a number of initiatives, the conclusions of which will be implemented from mid-2009.