Sanofi sets up biotech plant, seeks partnerships

By Caroline Jacobs

VITRY-SUR-SEINE, France (Reuters) - Sanofi-Aventis (SASY.PA) announced a 200 million euro ($265 million) plan to convert a factory to biotechnology, highlighting efforts by the world's fourth largest drugmaker to penetrate the growing sector.

The French group's Vitry-sur-Seine site near Paris will be dedicated to researching, developing and making biotechnology products and its doors will be thrown open to small biotech companies to help accelerate Sanofi's discovery of new drugs through partnerships.

"We will also welcome other biotechnology companies," chief executive Chris Viehbacher said on Tuesday. "It's an opportunity for the company to do partnerships with biotechnology and research companies."

Sanofi aims to boost its biotech-based products, which are harder to copy than chemical-based treatments, to about 50 percent of its drug portfolio in the next five years from 14 percent.

After its recent pipeline overhaul, Sanofi's R&D team aims to add 20 new products a year to the portfolio -- five of which should come in through partnerships and at least five of which should be biotech products.

Sanofi's quest for biotech products comes as an Ernst & Young report showed more and more biotechnology companies will probably look for buyers or go bust as the economic crisis is making it hard to get access to cash to continue to run their business.

MONOCLONAL ANTIBODIES

Sanofi is partly betting for growth on monoclonal antibodies, a fast-growing category of drugs treating diseases like cancer and rheumatoid arthritis, which offer new ways for more effective treatments with fewer side effects.

"The investment of nearly 200 million euros will give rise to the first cell culture biotechnology platform of the group to produce monoclonal antibodies as from 2012," Sanofi said.

It has touted cancer candidate aflibercept, developed with Regeneron Pharmaceuticals (REGN.O), as a potential blockbuster. The drug blocks the blood supply to tumors and is being tested in four final stage trials, including in colorectal cancer.

Antibodies are immune system proteins that recognize and help orchestrate an immune attack on bacteria, viruses and parasites. Monocolonal antibodies are engineered to attack a certain protein.

Sanofi last week showed a refurbished pipeline of drugs in development, ditching 14 drugs, to focus on those with the most promising future as patent expiries on several key drugs open the door to cheaper copies, threatening about a fifth of its sales.

At a conference call last week R&D head Marc Cluzel said Sanofi was a bit thin on drugs in early and mid-stage clinical trials. Accelerating partnership agreements with biotechnology companies could help fill in some of the gaps, he said then.

Sanofi's slimmer portfolio has 51 projects in clinical development of which 21 are in the final Phase III studies or have been submitted for regulatory approval. Vaccines represent 35 percent of the total, other biological products 14 percent and external collaborations 27 percent.

Sanofi is also looking for bolt-on acquisitions to improve its pipeline.