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Sanofi to create massive standalone API producer by melding six sites in Europe; IPO to come

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New CEO Paul Hudson has pledged to squeeze €2 billion out of Sanofi’s annual costs in a couple of years through a mix of methods that leans heavily on clamping down on its manufacturing budgets. It has now announced a plan that it says will not only do that but add to its top line. 

The French drugmaker today trumpeted plans to create the world’s second largest API production operation by clumping together its six API manufacturing sites in Europe and the U.K. It said the operation, with 3,100 employees, is projected to have about €1 billion in sales by 2022. 

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Sanofi intends to decide by then whether to float an IPO for the new French-based company on Euronext Paris. It said the company, in which it will hold a 30% share, will be debt-free to enhance its investment ability.

“With this endeavor, this new entity would 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,” Philippe Luscan, executive VP of Sanofi global Industrial affairs said in a statement. 

RELATED: Sanofi to add 350 jobs at shared services site in Hungary

Sanofi says it will include its API commercial and development operations with its API manufacturing sites Brindisi, Italy: Frankfurt, Germany; Haverhill, UK; St Aubin les Elbeuf and in Vertolaye, France and in Újpest, Hungary. 

The company said that such a business would help alleviate drug shortages and balance Europe’s “heavy reliance on API sourced from the Asian region.”

That of course has been top of mind as COVID-19 has wreaked havoc on manufacturing in China, the world’s Walmart of API sales. It says that statistics show 60% of global API production comes from China and India. 

 

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