Sanofi to sell generic-drug unit to focus on biotech
PARIS/LONDON: Sanofi SA plans to sell its European generic-drug unit to buyout firm Advent International Corp for €1.9 billion ($2.4 billion) as part of a broader move by chief executive Olivier Brandicourt to focus resources on biotechnology and new medicines.
“Advent has made a binding and fully financed offer, and the companies are in exclusive negotiations,’’ Paris-based Sanofi said in a statement yesterday.
The deal should close by the end of the year, it said.
Brandicourt has undertaken a series of transactions to shift Sanofi towards businesses with more potential for growth.
The company has announced about $16 billion of deals this year, agreeing to buy Bioverativ Inc to expand in haemophilia treatments and Ablynx NV to gain an experimental medicine for another rare bleeding disorder.
The French company isn’t the only drugmaker revamping its product offerings and pipeline to adjust to industry changes.
Novartis AG also yesterday began a $8.7 billion cash offer for AveXis Inc to gain at least one promising experimental drug for a rare and often fatal disease, using some of the $13 billion from selling its stake in a consumer-health joint venture.
GlaxoSmithKline Plc has also been reviewing its portfolio, and is offloading its rare-disease division to a biotechnology company as treatment sales have flagged.
Besides generics, Brandicourt has overseen the divestiture of Sanofi’s veterinary-medicines business to Boehringer Ingelheim GmbH in a €22.8-billion asset swap.
“The French drugmaker is also exploring the sale of some European over-the-counter treatments,’’ people with knowledge of the matter said last month.
While the generics market is expanding in Europe as more brand-name drugs go off patent, competition and pricing pressure in the sector are increasing.
Governments have made reimbursement cuts as part of an effort to curb health-care costs, while consolidation among wholesalers and retailers in some markets is increasing their power to negotiate with manufacturers of generics, according to Moody’s Investors Service.
Advent and another buyout firm, BC Partners, went head-to-head in competing to buy the Sanofi unit, which is known as Zentiva, people familiar with the matter said last week.
Other bidders including closely-held Brazilian drugmaker EMS and buyout firm Carlyle Group LP remained interested in the business as of last week, they said.
Sanofi said in October 2016 that it was thinking of divesting the business. Sanofi bought Zentiva NV, a publicly traded Czech generic-drug company, in 2009 for about $2.6 billion.
Sanofi’s sales of generic medicines fell 3.3% at constant exchange rates last year, while overall sales climbed 5.6%, the company said in February.
Prague-based Zentiva, which trace its roots back to the Black Eagle pharmacy in the 15th century, operates in 50 countries, according to its website.