Sanofi will exit consumer health and boost R&D investment
Sanofi is following in the footsteps of a number of its peers in pharma with a plan to spin off its consumer health business into a separate company and focus its efforts on its prescription drugs business.
In its third-quarter results update, Sanofi said the consumer health unit – which owns brands like allergy therapies Allegra and Xyzal, irritable bowel syndrome product Buscopan, painkiller Doliprane, and Pharmaton dietary supplement – will separate in the fourth quarter of 2024 “at the earliest.”
The business – which has been operating as a standalone business since 2020 and had sales of €1.245 billion in the third quarter – will most likely be set up as a publicly-listed company, headquartered in France, said the pharma group.
The range of consumer healthcare products it offers will also be “streamlined” ahead of the spin-off. According to the unit’s head, Julie van Ongevalle, becoming a standalone company will provide “increased agility and flexibility to grow our portfolio of brands and further address our customers’ needs across categories.”
The separation will enable “greater management focus and resource allocation to the needs of the biopharma business, where value-creating opportunities and longer-term operational levers have been identified to support the accelerated R&D investments,” said Sanofi.
Chief executive Paul Hudson said the move will be accompanied by measures to “optimise” Sanofi’s cost structure, with the aim of trimming €2.7 billion off its spending that will also be re-invested in R&D and other growth drivers as part of the company’s ‘Play to Win’ strategy.
That includes a “doubling down on areas where we can make the biggest impact for patients,” he said. Among the projects highlighted as needing additional spending next year are multiple sclerosis candidate frexalimab, vaccines for respiratory syncytial virus and pneumococcal disease, amlitelimab for atopic dermatitis, and the Johnson & Johnson-partnered extraintestinal pathogenic Escherichia coli (ExPEC) programme, all in phase 3.
Sanofi recorded sales of just under €12 billion in the third quarter, up 3% at constant exchange rates, driven by its specialty care business and particularly immunology blockbuster Dupixent (dupilumab), which grew by a third to €2.8 billion.
The company said new RSV prevention antibody Beyfortus (nirsevimab), once-weekly haemophilia A therapy Altuviio (efanesoctocog alfa), and Tzield (teplizumab) for type 1 diabetes have started strongly since launch, causing it to raise its second-half sales expectations by more than €500 million.