|Sanofi CEO Olivier Brandicourt|
Shortly after Merial was founded in 1997 as a joint venture between Merck ($MRK) and Sanofi ($SNY), then known as Rhône Mérieux, it grew into one of the world's largest animal health companies. In 2009, Sanofi bought out Merck's stake in Merial, and the animal health company continued to be a bright spot for Sanofi, charting mostly reliable sales and earnings that helped prop up dips in its other businesses. But now Sanofi CEO Olivier Brandicourt may be considering a Merial spinoff.
Brandicourt will reveal his plans for Merial on Nov. 6 during an investor day, according to anonymous sources who spoke to Bloomberg. In addition to a spinoff, the company might be considering bringing in partners, the sources said. Sanofi is also reportedly considering options for its biosurgery and renal units, as well as a nutrition business, the news service reported.
The news comes a little more than two months after Brandicourt restructured Sanofi into 5 separate operations, one of which was Merial. The restructuring ended up creating three entirely new business units, but little changed for the company's animal health business, because Merial was already operating as an independent unit. Carsten Hellman, the Sanofi executive vice president who was at the helm of Merial, retained his position in the restructuring.
Merial has been a strong performer for Sanofi over the past year. The unit's sales in the second quarter of this year were up 14%, largely on the strength of NexGard, a chewable flea-and-tick fighter for dogs. The product, designed to replace topical flea products that pet owners have traditionally used, continues to perform well, despite competition from a similar Merck product.
In addition to strong organic growth, Merial has also made some strategic deals to boost its product offerings. Last December, for example, it bought the equine medicines Legend/Hyonate (hyaluronate sodium) and Marquis (ponazuril) from Bayer. The additions became part of Merial's growing suite of products for horse health, which includes drugs, vaccines and digital tools.
- read more at FiercePharma
- here's the Bloomberg report