Sanofi recently confirmed that the French drugmaker has decided for sure to sell off its generic drug unit in Europe, a decision that will affect two manufacturing plants in the Czech Republic and Romania.
Sanofi’s generics business is built around Zentiva, a Czech business that Sanofi acquired control of in 2008 for $2.6 billion. The business is particularly strong in the Czech Republic, Romania and Turkey.
Sanofi CEO Olivier Brandicourt recently informed investors that the company has “made a definitive decision to initiate a carve-out process and divest the generics portfolio in Europe,” according to a SeekingAlpha transcript of the Q3 earnings call. However, he declined to provide details.
That said, SeeNews recently reported that a filing with the Bucharest Stock Exchange said “Sanofi will be looking for a potential acquirer that will leverage the mid and long-term sustainable growth opportunities for this business.” The filing, made by Zentiva Chairman Emmanuelle Valentin, went on to say that Sanofi remained committed to its generics business in other parts of the world and that it intends to focus generics on emerging markets.
A spokesperson for the company offered some insight. She said the planned scope of the divestment is the generics business “related to Europe,” so it excludes Russia, the Commonwealth of Independent States (CIS) and Turkey. As far as manufacturing, that includes the two “dedicated manufacturing sites producing and distributing generics for the European market,” one in Prague, Czech Republic, and the other in Bucharest, Romania.
Zentiva earlier trimmed its manufacturing operations when it sold an API and drug manufacturing facility in Hlohovec, Slovakia, to Wood Pharma Holding in 2012, for an undisclosed amount. At the the time, then-Zentiva CEO Jérôme Silvestre said the company would shift its focus on building up its generics production in Turkey. Zentiva bought Eczacıbaşı Generic Pharmaceuticals in Turkey in 2007 before it was acquired itself the next year by Sanofi.