Sanofi to sell generic-drug unit to fo­cus on biotech

Bangkok Post - - BUSINESS -

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.

REUTERS

The com­pany’s logo is seen at Sanofi SA’s head­quar­ters in Paris.

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