The REAL story

On Tuesday Paul Hudson Sanofi’s new CEO told reporters;

“It’s clear when I talk to people inside and outside the company [that] we can be more specific about what excites us in the pipeline. It’s a story that needs to be better told. I’ll play a big part of that, but so will our R&D leaders.”

Well we’d be remiss in our duties if we didn’t help Paul out, after all who knows the Sanofi story better than we do. So cuddle up, put your jammy’s on and let Grandpa Dave tell you a story.

Once upon a time there was a large pharmaceutical company that had the hottest product in diabetes. A product which truly filled an unmet medical need, worked very well and had no competition. A product so good that it was virtually impossible to screw up as it sold itself. About all the company had to do was sit back and count the money which was coming in by the boatload.

Like so many large pharmaceutical companies with a mega blockbuster that was printing money they decided to expand beyond this mega blockbuster and become a company immersed in diabetes. Way back then it all looked so promising, the pipeline was filled, the strategy seemed right and the mega blockbuster continued to print money. There were few if any signs that the good times would come to end, it looked as if the party would never end.

Naturally the success of the mega blockbuster brought with it the feeling that since they were good at one thing diabetes, they would be good at all thing’s diabetes. The company then set out to find the next big thing not just on drug side but also devices too. After all they envisioned becoming a one stop diabetes solution providing a complete diabetes management system, a system which would contain not just the drugs the patient used but the devices too, a system we today call Austin. This was truly innovative and frankly the company should be given credit for their vision.

Unfortunately this excellent vision was combined with lousy execution which was combined with a fair amount of hubris and arrogance. All of sudden looming on the horizon was a major threat to the goose that was laying all those very profitable eggs. The pipeline which had looked promising wasn’t living up to expectations and the competition was getting their act together starting to fight back aggressively.

Rather than be truly innovative and follow up the mega blockbuster with another drug that offered superior performance they came out with a successor which only offered an incremental benefit over its predecessor. Yet the company believed they could convince everyone that this incremental benefit was actually a major improvement, enough so that no one would switch to a biosimilar version of the mega blockbuster. Doubling down on this ill-advised strategy they told payors, the people who control the keys to the kingdom, that this new drug would cost the same possibly more than mega blockbuster.

All this was happening while their main competitors were telling payors their version of the mega blockbuster would be cheaper. Not surprisingly to everyone but the company payors who’d had price increases forced upon them when the mega blockbuster had no competition exacted their revenge by favoring the competitors’ drugs over the mega blockbuster. A decision which was the beginning of the end.

Try as they might to convince everyone that the wins by their competitors wouldn’t hurt sales of the mega blockbuster the cheaper price won out. Sales instead of increasing as they had been when the drug had no competition began to decrease. The new drug which was supposed to replace the mega blockbuster wasn’t doing anything either. That once promising pipeline failed to deliver anything of substance. The move into devices failed and all the once promising partnerships began falling apart.

The situation became so bad the king who once ruled this kingdom was beheaded. The search for the new ruler didn’t go well either with the company eventually settling on a king that impressed no one. Hence began a series of beheadings with many subjects fleeing the kingdom before the executioner’s ax arrived at their castle.

Desperate to put his mark on the kingdom the new king did much of what the old king did only didn’t do it as well as the beheaded king before him. The pipeline continued to flounder, partnerships continued to fall apart, and sales continued to slide. A company once oblivious to what was going on around them, so blind with hubris and arrogance all of sudden acknowledged what was in plain sight to everyone else, the emperor truly had no clothes.

The golden goose was pronounced dead, there was nothing coming that would come close to replacing the golden goose, so it was time to surrender. At least temporarily for in a move fitting for a company filled with hubris and arrogance they would regroup and come back stronger than ever. Or at least that was the plan which for a company that has never executed in the past made the plan as worthless as the paper it was printed on.

Nothing much really changed, the pipeline continued to fail, partnerships continued to fall apart so once again it was time for a new king, Only difference this time is rather than beheading the old king he was exiled to the wine region of the kingdom and condemned to drink cheap boxed wine for the remainder of his life.

So now the new king has arrived embarking on a tour of his kingdom. A listening tour if you will, a tour to get in touch with his loyal subjects and disgruntled Lords and Ladies. Will the new king do better than the previous kings, one beheaded and the other condemned to drinking cheap boxed wine? Well as Momma Kliff used to say, he can’t do much worse.

Should he take ownership of past mistakes, make some tough decisions while demanding accountability things might be ok. However if he follows his predecessors failing to acknowledge the very real structural problems within the kingdom itself, he will suffer the same fate as those who came before him. We wish him well on his quest and will only offer one piece of advice, rent a villa rather buying.

This my friends is the Sanofi story.