Sanofi Announces Plan to Spin Off Consumer Healthcare Unit, Files Prospectus for New Independent Entity

Oct 27, 2023 16:51 CST Updated 16:51

Sanofi

Pharmaceutical R&D Developer

On October 27, according to Endpoints News, Sanofi announced plansSpin off its consumer health division, and re-adjust the company's R&D priorities.

Sanofi is reviewing options for a potential split, but said the most likely option is to create an independent publicly traded company headquartered in France through a "capital markets transaction."

The company said in a statement on Friday that the moveAs early as the fourth quarter of 2024。

Big Pharma Breaks Down

In recent years, in order to consolidate their positions, large pharmaceutical companies have successively divested or spun off their consumer health businesses, focusing on innovative drug development. Sanofi is not the first to do so.

More than a year ago,GSK Spins Off Its Consumer Health UnitFor an independent company named Haleon Plc.

At the beginning of this year,Johnson & Johnson has also spun off its consumer division.For years, the company has consistently claimed to be a conglomerate with consumer and device businesses related to pharmaceuticals.

As early as 2016,PfizerHad already planned to spin off its consumer health division.

In addition, Novartis also completedThe Spin-off of Sandoz Generics Business, becoming what it calls a "pure" pharmaceutical company.

Sanofi CEO Paul Hudson said in a statement: "We are deepening our investment in R&D, taking steps to become a pure biopharmaceutical company, and further optimizing our cost structure."

Cutting Pipeline

Sanofi's updated strategy, outlined on Friday, also includes increasing investment in its experimental drug pipeline, partly through cost-cutting measures aimed at freeing up 2 billion euros over the next two years.

Hudson emphasized that in order to cut costs, Sanofi will be redistributed internally within the company.

"This year, our expenditure on R&D will be higher than ever before. In 2024, and possibly even in 2025, our spending will increase further."Hudson said.

Although he refused to disclose which specific plans would be cut, he stated,Cancer, Neurology, and Inflammatory DiseasesSome experimental assets in this aspect may be cut.

Moreover, Sanofi may be willing to advance other assets, even those with higher risks.

He cited the company'sOral TNF InhibitorIt's a small molecule that could eventually fall under regulation by the U.S. Inflation Reduction Act if successful, and they might be willing to bet on conducting several larger trials to bring it to market quickly.

Additionally, Sanofi released its Q3 earnings on Friday.Sales Decreased by 4.1%, almost entirely due to U.S. generic competition for its multiple sclerosis drug Aubagio.

Reference link:

https://endpts.com/sanofi-will-spin-out-consumer-unit-putting-weight-behind-rd-efforts/

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