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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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January 28, 2004

Not in My European Back Yard

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Posted by Derek

I wanted to mention another thing about Sanofi-Synthelabo's bid for Aventis. I hope that the French government keeps in mind, as they promote this deal, that one of the main consequences of such mergers is loss of jobs. Guys, that's the point. Associate directors of regional marketing, VPs for regulatory affairs - these people have to be thrown over the side, or the numbers just don't make sense.

In the nastier mergers, that crowd on the aft deck gets even thicker, and features R&D staff from the newly redundant therapeutic areas. Ideally, you'd want to hang on to those people (after all, this big new company is going to be doing more research, right?), but sometimes they get tossed. And that's not even taking into account many of the good ones who leave during the chaos for better (and, one hopes, more stable) new jobs - for now, I'll concentrate on involuntary departures.

Here's the question: where is this new French company going to cut jobs? Surely not in France! The unions there are famously fierce, for one thing, and it's hard to see how Chirac's government could be pushing so hard for something that will lead to thousands of itsconstituents being fired. France's unemployment is high enough already, thanks. So where?

Germany? That won't be popular. Die Arbeitslosigskeit problem is already the biggest issue in German politics. There are a lot of ex-Hoechst people in Aventis. . .but the Germans have already caught on:

The prime minister of the state of Hesse, Roland Koch, called on the German government to use its influence with French officials to block the unsolicited, $57 billion bid for Aventis by Sanofi-Synthebo, which he said could deprive Germany of jobs and access to research.

"The federal government has to bring its influence to bear against it," Koch said in a statement. "It's not just a question of exchanging shares, it's also about chances for jobs and research in the future." Germany's economics and labor minister, Wolfgang Clement, said Berlin would defend the company's jobs here.

So where? We're rapidly narrowing things down, unfortunately. As one of my correspondents put it, "I would be pretty nervous if I were in Bridgewater now." Bingo! That's the former Hoechst site in New Jersey, Aventis's biggest R&D in the US. It's not like they don't have a history of vacating buildings - try visiting what used to be the research sites of Marion Merrell Dow or Rhone-Poulenc Rohrer (that was a nice one, in its day.) I have to believe that this is where a lot of slack will be made up.

That'll be quite a feat. As was made clear in that Boehringer speech I quoted from last week, just about every other European pharma company is looking to expand operations in the US. And the new Sanofi-Synthelabo-Aventis might be forced to do the opposite, just to keep down the uproar at home. EU industrial policy at its best.

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