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Sanofi said to be looking at options for $30bn consumer health unit

Rumoured plans come ahead of strategic update meeting next month

Sanofi

Sanofi’s new chief executive Paul Hudson is considering options of the company’s consumer health business as he tries to set his own stamp on the business, according to media reports.

Citing undisclosed sources, both Reuters and Bloomberg suggest private discussions are going on to gauge shareholder reactions to a possible sale or spin-out of the unit – which could be worth around $30bn – ahead of Sanofi’s strategic update meeting next month.

One option under consideration is separating the business – which had revenues of €4.7bn (around $5.2bn) last year – from the rest of the Sanofi group via an initial public offering (IPO), according to the sources.

Sanofi’s consumer health brands include allergy treatment Allegra, Rolaids antacids, IcyHot for muscle pain and the Dulcolax laxative range.

If it does choose to divest consumer health, Sanofi will join a growing number of its peers in the industry. Many have decided either to sell off the divisions in whole or in part – including Novartis, Merck KGaA, Bristol-Myers Squibb and Bayer for example – while GlaxoSmithKline and Pfizer both slimmed down their range before combining their operations in a joint venture.

Hudson took over from Olivier Brandicourt at the helm of the French drugmaker on 1 September, after productive spells at Novartis and AstraZeneca, and the appointment has been well-received by analysts who say the appointment of a non-French speaking CEO would help modernise Sanofi’s culture.

There has been speculation since the appointment that some big strategic changes may be on the way, perhaps following an AstraZeneca style model under Pascal Soriot of jettisoning older and non-core products to raise cash for internal R&D and bolt-on deals to boost the pipeline, as well as reducing overheads.

Sanofi has had a difficult few years following the loss of patent protection for its former diabetes cash cow Lantus (insulin glargine), with some pipeline successes – notably atopic dermatitis and asthma drug Dupixent (dupilumab).

There have been some failures as well however, such as dengue vaccine Dengvaxia and underperforming cholesterol drug Praluent (alirocumab).

Earlier this year, Sanofi said its pipeline could generate nine new medicines and 25 additional indications for existing drugs between 2019 to 2022, and subsequently announced a series of job and programme cuts as it shifted R&D resources to more promising projects.

That included a narrower focus on diabetes and greater investment in oncology, immunology and inflammation, rare diseases and vaccines.

Article by
Phil Taylor

22nd November 2019

From: Marketing

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