Sanofi plans new European industrial champion for active pharmaceutical ingredients (API)

Industry Park Höchst (K607) - The Business Unit Consumer Healthcare and the Works Council are located in the office building K607. (Photo: Martin Joppen / Sanofi)

- A new company(1) would ensure significant active pharmaceutical ingredient (API) manufacturing and supply capacity for patients in Europe and beyond.
- The new industry champion would rank 2(2) worldwide, with an estimated revenue of €1 billion in 2022.
- Headquarters would be in France. An IPO on Euronext in Paris would be decided in 2022 depending on market conditions.

Sanofi plans to establish a large leading European company for the production and marketing of active pharmaceutical ingredients (APIs) for the pharmaceutical industry. The project envisions an independent company that would combine the commercialization and development activities of the Sanofi API unit with six of its API production sites: Brindisi (Italy), Frankfurt Chemistry (Germany), Haverhill (UK), St Aubin les Elbeuf (France), Újpest (Hungary), and Vertolaye (France).

Against the backdrop of increasing supply shortages affecting patient care, the new unit would emphasize the importance of active ingredient manufacturing in Europe. The company would contribute to supporting and securing production and supply capacities in Europe and beyond. A new active pharmaceutical ingredient champion could help balance Europe’s strong dependence on Asia. (3)

The new company would be one of the world's second-largest API manufacturers in the industry, with an estimated revenue of €1 billion in 2022. The company would employ 3,100 staff and be headquartered in France. An IPO on Euronext in Paris would be decided in 2022 depending on market conditions.

Philippe Luscan, Executive Vice President, Global Industrial Affairs at Sanofi, comments on the initiative: “Based on the expertise and experience we have gained over decades in our industrial network, this new entity would contribute to greater stability in the supply of medicines for millions of patients in Europe and beyond. As an agile, independent company, the new unit could fully leverage its growth potential, especially if it expands its third-party customer business in an active pharmaceutical market estimated to grow by 6% annually.” (4)

The new independent unit plans to expand its third-party customer business and partnerships with other pharmaceutical companies. It aims to benefit from new growth opportunities and quickly adapt to customer needs. The new company would be positioned to capitalize on its clear competitive strengths, including a broad portfolio of both volume and niche products, high-quality standards, competitive pricing, industrial capabilities, and cutting-edge technology across Europe (including France, Italy, Germany, Hungary, and the UK), as well as a broad commercial network covering more than 80 countries.

Sanofi has a strong interest in the success of the new company and intends to establish a long-term customer relationship with the new API supplier. Sanofi plans to hold a minority stake of approximately 30% in the new company. The plans for the new company are based on a debt-free basis, allowing Sanofi to maximize its future investment capacity. Sanofi intends to remain a key customer of the new company.

About Active Pharmaceutical Ingredients (APIs):

Active Pharmaceutical Ingredients or APIs are chemicals or biologics that provide a therapeutic added benefit in a medication. They are essential molecules needed for the production of medicines.

1 Subject to approval by social partners.
2 Source: Comparison with published data from the annual reports of major API manufacturers.
3 CPA Industry Report 2019: 60% of global API volume production is based in China and India.
4 Source: Estimated growth forecast based on expert interviews and the Technavio report “Active Pharmaceutical Ingredients Market by Manufacturing Type and Geography – Forecast and Analysis 2020-2024,” Dec 2019