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“Excellent results” from Sanofi: “It’s a bit of a colossus with feet of clay”, warns a health economist



Sanofi recorded in 2020 a record profit of 12.3 billion euros, an increase of 340% compared to 2019. The group will pay 4 billion euros in dividends to its shareholders, enough to revive the controversy after the announcement of the elimination of a thousand jobs in France, including 400 in research and development. “It’s a bit of a colossus with feet of clay, for 10 or 15 years the results have not been there“, explained Friday February 5 on franceinfo Frédéric Bizard, professor of economics at ESCP Business School, president of the Health institute.

franceinfo: Is this the right time to pay dividends to shareholders?

The subject is more complex than it looks and a simplistic approach should be avoided. On the one hand, there is something absolutely inaudible for the employees of the company, which is to see a company with colossal, even insolent financial health, in 2020 make layoffs. You can give all the explanations you want, there is something inaudible with a particularly unwelcome temporality. The second thing is an economic reality. Sanofi is forced to pay a rising dividend if the company does not want to weaken itself and become a prey compared to its competitors. That is to say risk a fall in its stock market share which could weaken it. It would put the whole group in danger.

Why is Sanofi fragile?

He is a bit of a colossus with feet of clay. Sanofi’s main competitors made the strategic shift towards biotechnologies, immunology, genomics, 10 or 15 years ago while Sanofi took it in 2019. Sanofi’s problem is in the efficiency of its research . For 10 or 15 years, the results have not been there. Sanofi has lagged behind in winning technologies, as we see with the anti-Covid vaccine, the group is not present in Messenger RNA vaccines where successful ones are. We can see that this strategy of outsourcing research presents risks. You have to find the right partners. Most of its profit is linked to the sale of 20% of the capital of its partner, Regeneron.

Is Sanofi’s ability to innovate guaranteed?

No, because we see that in the winning technologies, Sanofi has fallen far behind. It’s a race against time, it’s a global race. We have talented researchers, a history, and in these messenger RNA technologies France has its place, but we really have to put in place a major strategic plan. We need a technology park in biotechnology and genomics. Either we have a national response and we can give a little hope to French employees and research, or we will continue to be on the path to decline.

Should the State maintain public aid?

This public support has proven its worth. France has divested in basic medical research. We went from 3.5 billion euros 10 years ago to 2.5 billion. So let’s not worsen the situation of underinvestment at a time when we are in a technological transition. Basic research really needs public support.

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