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How Sanofi strengthened its position in pharmaceuticals through strategic M&A deals

by William Mansfield, on Sep 2, 2020 10:30:29 AM

With the announcement of a $3.4 billion deal to buy Principia Biopharma, a US biotech company, Sanofi is set on a path to increase its patent portfolio strength under the leadership of CEO Paul Hudson. The new CEO is determined to restore the company's declining patent portfolio to its former glory and is doing so by cutting costs and investing in innovative medicine.

The company's litigation strategy has also seen a change in direction. Previously the company was actively filing cases and was involved in 127 US patent lawsuits since Jan 2009, appearing as a plaintiff in 113 of these. 

 

In recent years, the company seems to have taken a back seat on this and has only filed one case in 2018, two in 2019, and four in 2020 so far.

 

Lex Machina : Sanofi's litigation activitySource: Lex Machina; Data is accurate as of 21 August 2020. Sanofi appears as the plaintiff in 113 instances, and the defendant in 13 and the third party in one case. 

 

Sanofi’s patent portfolio – in depth

 

Sanofi has seen a significant reduction in its portfolio size over the past decade. This reduction in size had a direct impact on the patent quality, which indicated that some higher quality patents that could still contribute to the overall quality also got cut down.

 

According to a recent analysis, Sanofi appears to be on the road to recovery with a notable increase in its Competitive Impact™ score, indicating improving patent quality. Competitive Impact is a two-dimensional measure which accounts for the technology relevance and market coverage of a portfolio, and is measured relative to other patents in the field, with a value of ‘1’ representing the global average.

 

 

Quality vs Quantity Development of Sanofi's Portfolio

 

 

Sanofi's biggest technological strength is in the field of medical devices, mainly in the area of automated injections (such as injections for administering insulin at home). In 2011, the auto-injector related patents contributed significantly to the company's portfolio strength and since then have helped solidify Sanofi's foothold in the medical device industry as indicated by the Patent Asset Index™ (PAI) score. The PAI accounts for the quantity and quality of active patents, to calculate the overall portfolio strength.

 

However, a visible decline in the areas closely linked to pharmaceuticals and drug development followed the rise in the importance of auto-injectors.

 

Development of Sanofi's Portfolio

 

Acquisition Impact

 

The company's acquisition of Synthrox Inc. for $2.4 billion under current CEO Hudson in 2019, Bioverative for $11.6 billion and, Ablynx for $4.8 billion in 2018 under former CEO Brandicourt, were highly strategic. These moves, directly addressed the decline in portfolio strength of Sanofi in the pharmaceutical industry. 

 

Acquisitions have helped the company strengthen its patent portfolio in the pharmaceutical business, while it already maintains a well-established medical device business.

 

The data collected by PatentSight and news of the latest acquisition of another pharma company, highlights Sanofi's dedicated efforts toward improving its portfolio strength in the pharmaceutical industry and suggests that future deals are possibly in the works.

 

Impact of acquisitions on Sanofi's portfolio

 

A closer look at the acquisitions made by Sanofi shows that all of these firms had a higher quality patent portfolio compared to Sanofi itself, which significantly contributed to improving the overall quality of the company's IP, further supporting the predictions of more deals being in the pipeline. 

 

AverageQuality

 

Conclusion
In light of recent events, it is clear that Hudson is actively looking to expand Sanofi's portfolio size and quality utilizing these acquisitions in fast-growth innovation areas. It seems M&A has become a top priority in the company's patent strategy and we can expect Sanofi's portfolio to keep growing in both quantity and quality.

To learn how to make informed M&A decisions and make the most out of patent insights, watch our on-demand webinar.

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Topics:"M&A"Mergers and AcquisitionsPharmaceuticals

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