Sanofi to Spin Off Global No.2 API Company to Reduce Europe's Heavy Reliance on Asian Sourcing
Feb 25, 2020 14:53
CST Updated
14:53
Sanofi
Pharmaceutical R&D Developer
February 25, 2020 /BioValleyBIOON/ -- Sanofi recently announced plans to spin off its existing six active pharmaceutical ingredient (API) manufacturing sites into an independent company, thereby creating an industry-leading API enterprise. The new company will combine Sanofi’s API commercial and development activities with its six European API production facilities: Brindisi (Italy), Frankfurt Chemistry (Germany), Haverhill (UK), St Aubin les Elbeuf (France), Újpest (Hungary), and Vertolaye (France).
By 2022, this new company will become the world’s second-largest active pharmaceutical ingredient (API) manufacturer., with projected sales reaching €1 billion and a workforce of 3,100 skilled employees. The new company is headquartered in France and will evaluate an initial public offering (IPO) on Euronext Paris by 2022, depending on market conditions.
Philippe Luscan, Executive Vice President of Global Industrial Affairs at Sanofi, stated in a press release: “Leveraging decades of expertise and experience accumulated across our industrial network, this new entity will help ensure greater stability in the supply of medicines to millions of patients in Europe and beyond. Through this initiative, the new entity will become an independent company capable of unlocking its growth potential, particularly by capturing all opportunities arising from new third-party sales and a market that grows at an annual rate of 6%.”
The company stated,The drug shortage issue is becoming increasingly severe. The new company will help support and ensure the production of active pharmaceutical ingredients (APIs) as well as supply capabilities in Europe and other regions, aiding in balancing Europe’s “heavy reliance on APIs sourced from Asia.”
Shortly before, Axios reported that there are currently 150 prescription drugs at risk of shortage in the United States, includingAntibiotics, generic drugs and certain brand-name drugs with no alternatives.
Currently, as the novel coronavirus pneumonia (COVID-19) is causing severe disruption to China's manufacturing industry,API Supply Issues Have Always Been a Focus of Industry Concern.According to statistics, 60% of the global production of active pharmaceutical ingredients (APIs) comes from China and India. Although factories in China are gradually resuming operations, transportation and traffic restrictions continue to slow down production. An Indian company that relies on Chinese APIs told Bloomberg last week that prices for commonly used drugs have risen by 40%-70%.
Data from industry sources indicate that China accounts for 13% of all active pharmaceutical ingredient (API) manufacturing facilities supplying the U.S. market, ranking behind the United States (28%), the European Union (26%), and India (18%). However, previous reports suggest that the proportion of APIs originating from China and ultimately reaching U.S. patients may be higher in terms of volume.
FDAThe Drug Shortage Task Force wrote in a report updated a few days ago, “As companies increasingly manufacture overseas and rely more frequently on contract manufacturers, the pharmaceutical supply chain has become ‘longer, more complex, and more fragmented.’”
The report states: “Although typical markets respond to shortages by increasing production, logistical and regulatory challenges, particularly the complexity of supply chains, may limit pharmaceutical manufacturers’ ability to ramp up output.”
Currently, the U.S. biopharmaceutical industry’s growing reliance on China extends beyond active pharmaceutical ingredients (APIs) to multiple other areas.Some industry experts are also concerned that, due to the impact of the novel coronavirus pandemic, contract service providers’ operational capacity will be constrained and healthcare systems strained, leading to delays in both preclinical and clinical studies.(Bio Valley Bioon.com)