(Refiles to add byline)
* R&D restructuring plan to be announced in weeks-CEO
* Expects acqusitions this year with 4 bln eur free cash
* Confirms outlook for min 7 pct earnings per share growth
* Zentiva to be a European generic platform
By Jan Korselt
PRAGUE, June 24 (Reuters) - French drugmaker Sanofi-Aventis
<SASY.PA> will announce restructuring plans for research and
development to improve efficiency and streamline decision-making
over the coming weeks, the firm's chief executive said.
Chris Viehbacher said that he expected acquisitions this
year, and reiterated that the company was ready to use its free
cash of 4 billion euros ($5.5 billion) for further expansion,
though he did not completely exclude a "mega deal" over $15
billion.
The firm was sticking to its previous target of at least 7
percent earnings per share growth on constant exchange rates for
the year, Viehbacher told Reuters, during a visit to Prague.
"We are clearly down the path to give a new dynamics to our
research and development organisations," said Viehbacher, who
was hired from GlaxoSmithKline <GSK.L> in December after Sanofi
dismissed CEO Gerard Le Fur following a series of product
setbacks.
"We have a number of things to address in terms of how we
get our people to work together, how we can provide more
latitude for creativity, how we can develop them scientifically
and how we can encourage external collaboration, because there
is a world of science out there."
He said the reorganisation would also deal with extending
collaboration with universities and government-funded
institutions.
A member of the CGT union, who attended a meeting with
management last Friday, told Reuters this week the firm was set
to announce a major restructuring of some of its business lines
and would give more details of its plans at a meeting with
unions next week. []
Viehbacher declined to comment on details of the
reorganisation, or possible layoffs, apart from 927 jobs cuts in
France announced last October.
"I think you will see a fair amount of communication over
the course of July, and we will follow up with detail in the
third to fourth quarter," he said.
Viehbacher has said he wanted to diversify the group by
acquiring small or mid-sized companies in areas including
vaccines, over-the counter drugs and generics, especially in
fast-growing emerging markets, such as eastern Europe, Latin
America and Asia.
ZENTIVA FOR EUROPE
The world's fourth biggest drugmaker by sales needs to
transform itself because more than a fifth of its current drug
sales could face generic competition by 2012.
Viehbacher said Sanofi would use Czech generic maker
Zentiva, bought in an voluntary offer valuing the firm at 43.9
billion crowns ($2.34 billion), as a base for expansion in
generics in western Europe.
This year, the firm gained full control of Zentiva to step
into the generics business in central and eastern Europe, along
with fast-growing Russia and Turkey.
"We will bring some people from other parts of the group to
Prague, and they will look at everything in Europe -- really
from Ireland to Russia," he said.
He said the company aimed to have a similar generics
platform in Latin America, where Sanofi bought Brazilian firm
Medley and Laboratorios Kendrick in Mexico, and in Asia.
"If we can find other acquisition opportunities like Zentiva
elsewhere, we will do that."
Viehbacher said the company wanted to invest its free cash
flow into growth, and it was on the lookout for deals.
"We are constantly looking, so yeah, we will probably do
some more deals this year, I just can't tell you when, because I
do not know when the fish is going to bite," he said.
The group's shares were down 2.8 percent at 46.1 by 1027 GMT
extending an earlier 2 percent loss and underperforming a 0.6
percent rise in Paris blue-chips <>.
Shares have gained 9.8 percent in the past year, outpacing
the Dow Jones Health Index <.SXDP>, which has dropped 9.6
percent in that time.
($1=18.73 Czech Crown)
($1=.7216 Euro)
(Editing by Hans Peters and Karen Foster)
