Sanofi to combat shortages with European medicines ingredient firm

Sanofi is to create a European company focused on production and marketing of active pharmaceutical ingredients (API) – the essential building blocks of medicines that are causing concerns amid fears of shortages due to the coronavirus outbreak in China.

As reported in pharmaphorum, there are concerns that the coronavirus COVID-19 outbreak could lead to shortages of API, many of which are manufactured in China.

Even without coronavirus there are ongoing problems around the integrity of the medicines supply in Europe, with concerns on medicine shortages coming to the fore amid the uncertainty caused by Brexit.

Sanofi’s project consists of creating a standalone company which would combine it’s API commercial and development activities with six of its European API production sites: Brindisi (Italy), Frankfurt Chemistry (Germany), Haverhill (UK), St Aubin les Elbeuf (France), Újpest (Hungary) and Vertolaye (France).

The new company would rank as the world's second largest API company with approximately a billion euros ($1.09 billion) in expected sales by 2022.

It is expected to include 3,100 skilled employees and to be headquartered in France.

Teva is currently the largest API manufacturer in the world, followed by companies such as Dr Reddy's, Aurobindo, and Cipla.

Sanofi said that a planned IPO on Euronext Paris would be evaluated with a decision expected by 2022, subject to market conditions.

By operating independently, the new entity plans to increase its sales to third parties and to expand its partnerships with other pharmaceutical companies in order to take advantage of new growth opportunities and have the ability to quickly adapt to customer needs.

According to Sanofi the new company will have a portfolio of both volume and niche products, and promises competitive pricing, backed by a commercial network covering more than 80 countries.

Sanofi said it will have a long-term customer relationship with the new API supplier and will hold a stake of around 30% in the new company.

The new company will be debt free in order to maximise its future investment ability, Sanofi said.