Search For Growth Drivers At Rhone-Poulenc Rorer

Declining profits for the second year running (Marketletter February 6) have prompted French drug industry observers to ask where Rhone-Poulenc Rorer is going. On the new product front, the launch of the anticancer agent Taxotere (docetaxol) in Mexico last December was surprisingly well-received by American specialists but one Paris-based analyst said he no longer has any idea where the company is going, saying its "visibility is almost down to zero."

With a stock market capitalization of $5.3 billion or 1.3 times annual sales and 16 times 1994 earnings, R-PR is one of the least sought-after stocks on Wall Street. In France the CGT union has called for meetings with management to clarify strategy.

However Michel de Rosen, the company's chairman and chief executive, says the strategy is clear. "The main object is to develop the company in the prescription drugs field by both accelerating the rate of new product launches and the rate of new acquisitions." Mr Rosen added that R-PR also wants to reinforce its presence in the blood product derivatives and self-medication sectors. Cost-cutting has continued with the reduction of 1,300 jobs last year (6% of the total workforce) and reorganization of R&D is in hand.