Sanofi to spin-out and launch European API manufacturer

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/NicoElNino)
(Image: Getty/NicoElNino)

Related tags: Sanofi, API, API quality, Coronavirus, India, China, Europe

According to the French company, the spinout would enter the market as the second largest API producer globally.

In order to create the company, Sanofi will pool six of its existing European active pharmaceutical ingredient (API) production sites, alongside commercial and development capabilities.

The company stated that it expects the as-yet unnamed, standalone company to reach sales of €1bn ($1.08bn) by 2022, making it the second largest API producer, behind Lonza.

The new company would enter the market with 3,100 staff members, a headquarters in France and six facilities spread across Europe, located in Brindisi, Italy, Frankfurt, Germany, Haverhill, UK, St Aubin les Elbeuf, France, Újpest, Hungary, and Vertolaye, France.

In 2022, a planned initial public offering (IPO) would take place on the Euronext Paris – though it was noted that a decision would be made nearer the time, dependent on market conditions.

Sanofi is pitching the manufacturer as a means of “balancing the industry’s heavy reliance on API sourced from the Asian region,”​ the company said in a statement.

This position coincides with several high-profile cases of Asian-produced APIs being recalled due to impurities​, as well as the ongoing difficulties with supply due to the coronavirus​.

Philippe Luscan, EVP of Global Industrial Affairs at Sanofi, alluded to such issues in a statement: “Based on the expertise and experience built over decades within our industrial network, this new entity would help ensure a greater stability in supplying drugs to millions of patients in Europe and beyond.”

The independent company would enter the market with several advantages, such as possessing a long-term partnership with a company of the scale of Sanofi, being debt-free and possessing an existing network of customers.

Sanofi will take a minority stake of approximately 30% of the established company.

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