Sanofi to create standalone European API production powerhouse

Sanofi's plans to create a European company to manufacture and market active pharmaceutical ingredients (APIs) should help to balance the region's heavy reliance on sourcing them from Asian markets, the French pharmaceutical firm said Monday.

It would rank as the world's second largest API producer, employing 3,100 people and with expected sales of €1 billion by 2022.

API sourcing and the global market's dependency on China have come into sharp focus recently following the coronavirus outbreak.

“Based on the expertise and experience built over decades within our industrial network, this new entity will help ensure a greater stability in supplying drugs to millions of patients in Europe and beyond," said Philippe Luscan, Executive Vice President, Global Industrial Affairs at Sanofi. "With this endeavor, this new entity will be agile as a standalone company and able to unlock its growth potential, especially in capturing new third-party sales and all the opportunities of a market growing at a pace of 6% per year."

By operating independently, the new entity plans to increase sales to third parties and to expand partnerships with other pharmaceutical companies.

Sanofi said it boasts a broad portfolio of both volume and niche products, high standards of quality, competitive pricing, state-of-the-art industrial capabilities and technologies across Europe as well as being able to leverage a commercial network covering more than 80 countries.

Sanofi will hold a minority stake of around 30% in the new company, which it intends to be debt free. It said it would decide whether to press ahead with a planned IPO on Euronext Paris by 2022, subject to market conditions.