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Erik  Familial  Hypercholesterolemia  USA  

Forecasting Health Assessment Michael Biddlecom, Director Corporate FP&A

May 15, 2013 Finance in Pharma & Healthcare Forum Philadelphia, PA

• Quick background on the New Genzyme and Sanofi

• Why check on the health of forecasting?

• Applying simple framework

• Genzyme example

• Applying to your organization

Topics for today

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Focused on rare diseases and multiple sclerosis (MS) 6 major marketed products 10,000 employees worldwide Founded in 1981 and pioneered treatments for rare diseases David Meeker, MD, CEO

About Genzyme

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• Strong relationships with patients and patient communities • World-class research targeted for unmet medical needs • Compassionate and committed employees

Our Personalized Approach

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Our Global Commitment

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Headquartered in the U.S.

with global locations in over 40 countries

Expanding manufacturing

capabilities in the U.S. and E.U.

Collaborating with patient communities, physicians,

universities, hospitals, charitable organizations,

companies globally

Serving patients in over 100 countries

Genzyme, a Sanofi company

•  In April 2011, Genzyme became a wholly owned subsidiary of Sanofi

•  We benefit from the reach and resources of one of the world’s largest pharmaceutical companies

•  Sanofi’s portfolio of products includes: prescription medicines, vaccines, generics, consumer health care, and animal health

•  110,000 employees worldwide

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Cardiovascular Late-stage treatment for Familial

Hypercholesterolemia (FH)

Genzyme’s Business Units

Rare Diseases Multiple Sclerosis

Genetic Diseases

One oral marketed product and

One late-stage infusion treatment

Endocrinology

Gaucher disease type 1, Fabry disease, Pompe disease, MPS I disease

Facilitating thyroid cancer treatment and testing

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Sanofi & Genzyme 2012 Revenue Results

8 Source: February 7, 2013 Sanofi earnings call

So, what do you mean by a “Forecast Health Assessment”?

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Strategic C-Level

Enabling Operations

Finance Teams

•  Top  line  risks  &  opportuni:es  •  Investment  decisions  &  trade-­‐

offs  •  Appropriate  risk  ga:ng  

•  Delivering  quality  numbers  on  :me  

•  Time  &  effort  from  finance  community  

•  Compliance  with  planning  guidance  

Why and What?

•  Focused engagement with multiple layers of the financial organization

•  Feedback mechanism

•  Systematically address the system and pain points

•  Way to identify opportunities for improvement and mitigate risks

•  Leverage pockets of expertise

•  Foundation for both quick-wins and more structural improvements

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What? Why?

•  Address root-cause if had recent errors in the forecast process

•  Show an appreciation that it’s just the final deliverable but effort to get there

•  Need to leverage - having to do more with less

•  Chatter is up on the process and lots of pain points

•  Recent high turnover

•  Recent merger or acquisition

•  Identify and mitigate risks

•  Looking for continuous improvement

People

Process

Technology

A Simple Framework

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•  Roles & responsibilities •  Tenure •  Skill set •  Organizational alignment •  Accountability

•  Link b/t business strategy and financial targets

•  Right level of detail •  Right metrics •  Reviews clearly defined

•  Single source of the truth •  Allows for decision making (e.g.

cost / patient; R&D project tracking; volume-price analysis)

•  Stable and quick

Applying the Framework

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Pre work

• Identify people for input • Develop questionnaire • Kick off from sponsor

Discovery

• Perform interviews • Compile feedback

Assessment

• Organize and prioritize • External benchmarking • Reviews with sponsors

Quick Wins

• Identify quick-wins to keep momentum • Implement

Communicate • Share results and plan with all involved

Structural Changes

• Address longer term improvements

2011 Sanofi integration

begins

•  Genzyme & Sanofi integration begins

•  New management •  New view of the

P&L

2012 Conclude financial system & process

integration

•  G/L •  Forecasting tool(s) •  Employee turnover

2013 Leverage systems,

tools & people

• Doing more with less • Driving efficiencies • Risk mitigation • Maintain data quality and basis for decision making

Genzyme Experience: So, how are we doing? What’s next?

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Area Description Planning tool Hyperion Financial Management (HFM), managed

centrally by Sanofi in Paris Reporting tools Essbase, Qlikview (financials, units, patients, market

data, volume/price analysis) Forecasts 1 budget and 2 forecasts through HFM Revenue updates Monthly Planning units ~ 400 Users ~ 170 Regions / Functions Commercial: 5 regions (US, Canada, EMEA, LATAM,

JAPAC) Industrial Affairs, G&A

Corporate FP&A Genzyme based in Cambridge, MA

Genzyme FP&A Overview

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•  Framework §  3-week project §  Complete prior to first corporate forecast

•  Project Support §  Sponsored by Genzyme CFO §  Used outside consultant −  Quick schedule −  Outside perspective −  Best practices

§  Two members of Corp FP&A team

•  Approach §  Interviews §  Summarize findings at multiple levels in organization §  Prioritize and implement

Project Approach

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Phase 1 focused on identifying quick win and structural recommendations to improve the global financial forecasting process

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•  Global forecasting process: Long-Range Plan, Budget, F1, F2, Monthly Revenue Forecasts, Quarterly / Latest Estimates

Objectives •  Perform an initial assessment of the existing forecasting process to identify current state challenges and

general pain points

•  Summarize and prioritize current state challenges and risks

•  Recommend approach and associated timing to complete the assessment phase and to develop process improvement opportunities (structural/strategic and tactical) ahead of F1

Phase 2 – Define and Implement Phase 1 – Prep and Discovery

Pre-work Discovery

•  Determine individuals to interview

•  Customize interview guides and materials

•  Schedule interview activities and kick-off project with the stakeholders

•  Finalize interview guide and approach

•  Conduct current state assessment

•  Conduct Interview sessions

•  Consolidate feedback

•  Identify top opportunities and risks

•  Conduct qualitative assessment of initiatives

Finalize Assessment

Process Deep Dive

Define Quick Wins

Implement Quick Wins

Communicate

Monitor

Future Activities dependent on discovery

Scope

The interviews guide contained questions which were structured around the People, Process, and Systems & Technology

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Inte

rvie

w G

uide

Cat

egor

ies

People Process Systems & Technology

•  Understand how the various roles in the forecasting process are defined, and the ways in which those involved in forecasting are prepared to meet their responsibilities

•  Understand the guidance provided during the forecasting process, the timing and protocol for producing and reviewing forecasts, the role and needs of stakeholders involved in the process and the interviewees' ideas about continuous improvement opportunities

•  Understand how Genzyme uses systems and technology in the forecast process and in validating, consolidating and manipulating the data

•  22 interviews with 35 interviewees were conducted over 23 hours from 2/11 – 2/22, with representatives from Corporate, Industrial Affairs, Business Unit Finance, Regions and Countries

Sampling of Questions

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People Process Systems & Technology •  Do you know who the

forecasting process owners / stakeholders are? Is it clear who signs off prior to loading the submission into HFM, who enters the submission data into HFM, and who reviews and approves prior to promotion to the next Review Level?

•  Is the current training provided appropriate to allow the forecasting process to operate to its fullest potential? If not, what changes would you recommend?

•  Is the current training provided appropriate to allow the forecasting process to operate to its fullest potential? If not, what changes would you recommend?

•  Are the purpose, goals and business assumptions around forecasting communicated and well understood for your Regions / BU / Market?

•  How do you measure performance of the process? Do you complete a process review after each cycle? If so, what changes have been identified and implemented?

•  Do you see any inherent risks in the current state forecasting process (e.g., timelines, guidance, validation, etc.)?

•  Is there a well-defined process for the consolidation and approval of forecast submissions?

•  Do you see any risks in the current systems / tools (e.g., data translation from local planning system to HFM, etc.)? If yes, what steps to date have you taken to mitigate these risks?

•  How are key decision makers asking to view or “slice” the data? Are their needs easily met through the existing systems and tools?

•  How do you translate data from your local planning tool(s) to HFM? What systems / tools do you use and what challenges do you experience in this activity?

External Benchmarking

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People

Process

Technology

Emerging Leading

Can be helpful in long term goal setting. Driven by complexity (markets, products) of business, maturity of firm and role of forecasting

Illustrative

Executive Summary – Key Themes & Example Findings

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The team conducted interviews of 35 members of the global Finance organization and found following key themes emerging from the discussions.

Key Themes

People-based vs. process-based activities

Short tenure across forecasting process owners

Insufficient time to review and analyze

Challenges collecting non-financial information

Disparate technology platforms and significant manual effort

Executive Summary – Summary of Recommended Actions

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Risk Org Level Resolution

Corp Region Country QW MT LT

Accuracy and Time for Reviews H H H P P

Inefficiencies Across Process and Submission H H H P P

Visibility and Transparency H M L P P

Turnover and Experience Gaps M M M P P

H – High, M – Med, L – Low QW – Quick Win, MT – Med Term, LT – Long Term Key:

•  When it might be helpful: §  Is chatter up from the business? §  Recent transformational event (e.g. merger, restructuring)

•  Approach §  Sponsorship at CFO level §  Address systemically or more focus on one area (e.g. planning systems) §  Execution −  Establish small internal team −  Use of consultant

•  Follow-through §  Share results with all the participated §  Create plan §  Execute and meet quick-wins to keep momentum!

Thoughts in applying to your organization

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Vision for Genzyme Corporate FP&A

▪  Strong  customer  orienta:on  ▪  Act  as  and  build  one  global  team  ▪  Open  and  honest  communica:on  ▪  Look  for  and  drive  improvements  in  process    

FP&A   Accuracy  &  Timeliness  Customer  Service  

Being  a  “reporter”  is  never  enough;  always  

seek  to  provide  insight  to  help  drive  the  business  

through  objec;ve  analysis  

No  one  ques;ons  the  quality  of  the  numbers  and  

we  are  proac;ve  in  mee;ng  ;melines  

Dedicated  support  to  our  customers,  collabora;ve  interac;ons  with  all  of  

Finance    

Vision  

Organiza,onal  pla/orms  

▪  Make  it  simple  –  dashboards,  metrics  ▪  Learn  and  know  the  business  ▪  Collabora:ve  and  team-­‐focused  ▪  Be  leaders  in  the  organiza:on  

Be  a  key  and  trusted  source  for  Genzyme  financial  plans  and  results.      A  partner    

within  the  Sanofi  finance  group.      Con:nually  drive  for  improvement  and  simplicity  in  what  we  do.      Influence  GZ  management  in  the  financial  direc:on  of  the  company  

This is Genzyme

Our focus on patients has guided our 30-year journey to become who

we are today; it will drive us going

forward.