It's Over For Sanofi and Merck European Joint Vaccines Venture

March 8
9:53 PM 2016

It's been 20 years since Sanofi and Merck & Co. joint ventured to market their vaccines in Europe. Now, they are planning to part ways as the output does not bring enough revenue for the two companies as announced on Tuesday.  The joint venture was known as Sanofi Pasteur MSD.

The joint venture where each company holds 50% will be divided and inserted back into the parent's operations. By the end of the year, the disunion will be concluded if there are no problems or difficulties are encountered with local labor laws or regulators. Last year, the Sanofi Pasteur MSD had earnings of about €824 million euros and provides nearly half of Europe's flu vaccines including shots that treat shingles and Gardasil which is a cervical cancer vaccine, according to Bloomberg.  

"We believe that focusing our efforts on opportunities unique to our respective companies will better position us to drive growth, execute in a more efficient manner and optimize vaccine coverage," Paris-based Sanofi and Kenilworth, New Jersey-based Merck said.

The chief executive of Sanofi, Olivier Brandicourt, is cost-cutting and restructuring the company's portfolio. Sanofi has been considering of exchanging Merial, its animal medicines business with Germany's Ingelheim's consumer health unit, as reported by the Financial Times.

A statement on Tuesday was released saying:  After carefully considering our individual strategic priorities, alongside the economic and regulatory environments for vaccine operations in the European Union, we have mutually agreed that it is in our best interest to manage our vaccine products portfolio independently.

Despite the falling revenue, the company pursued their parting ways as sales at the joint venture dropped in recent years.  The 2015 sales declined to $923 million which is an 18% slip from $1.13 billion a year earlier based on Merck's recent regulatory filing, as reported by The Wall Street Journal.

It's the end of the line for both drug makers Merck & Co. and Sanofi SA which partnership will totally dissolve by the end of the year if no problems occur.  Without anything in particular, both companies mentioned that any affliction on employees shall be responsibly taken care of. 

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