Sanofi to buy Indian vaccine biz

The acquisition will strengthen Sanofi’s position in emerging markets and the vaccine sector, both of which the company has identified as areas that can help it grow without entering into a mega-merger.

Shantha has established a presence through Asia-Pacific, Africa and Latin America, all areas Sanofi has targeted for growth, by developing a portfolio of vaccines for diseases afflicting these regions. These vaccines cover diseases including cholera, diphtheria and tetanus.

Christopher Viehbacher, CEO at Sanofi, commented that the companies have complementary vaccine portfolios and that this will help accelerate “growth in strategically important emerging markets​”.

For the current fiscal year Hyderabad-based Shantha is expected to generate revenues of $90m but Sanofi believes this will grow significantly in coming years.

This positive outlook is underpinned by belief in the strength of Shantha’s pipeline, which includes vaccines for rotavirus, conjugated typhoid and human papillomavirus (HPV). Furthermore, Sanofi believes that its financial muscle will increase sales.

This view was supported by Alain Mérieux, chairman of Mérieux Alliance that is selling its stake in Shantha to Sanofi. He commented: “Shantha’s future development necessitates support from a major international vaccine company.​”

The acquisition will also give Sanofi access to “state-of-the-art manufacturing facilities​”, according to Viehbacher, which increases the company’s production capacity in Asia and helps it meet global demand for vaccines.

Under the terms of the agreement Sanofi Pasteur will acquire Merieux Alliance's French subsidiary ShanH, which owns 80 per cent Shantha. Alain Mérieux will chair the Board of ShanH and a new joint committee on vaccine strategy in emerging markets.

Viehbacher referred to the joint committee as evidence of Sanofi’s commitment to continuing Shantha’s policy of affordable pricing for important vaccines.