The world has changed since Sanofi in February unveiled its intention to spin off its API production operations in Europe, but the company is still pressing ahead with the split, sources told Reuters.
Sanofi will start prepping this fall for a stock market listing of the new company by 2022 and is discussing the business with potential investors, including France’s state investment bank, sources told the news service.
After Sanofi’s recent move to cut up to 1,680 jobs in Europe, the company expects discussions with employee representatives to be “very challenging," a source told the news service. Also complicating the effort is the COVID-19 pandemic and political sensitivities over drug supplies, Reuters reports.
The new company, expected to become the world's second largest producer of active pharmaceutical ingredients by sales, will have 3,100 employees and projected revenues of €1 billion by 2022. It’ll comprise six Sanofi sites in France, Italy, Germany, Hungary and the U.K. Sanofi plans to own about 30% of the new company.
The spinoff is part of CEO Paul Hudson’s plan to simplify the global drug giant and focus on growth products, such as atopic dermatitis star Dupixent. Driven by launches in new markets and new indications, Hudson has said the drug could generate €10 billion in peak sales.
Hudson, who became CEO last September and laid out his vision for Sanofi in December, has also set out to cut €2 billion in annual expenses by 2022. The company plans to cut jobs in support functions, tighten manufacturing budgets, revamp purchasing, cut down on travel and more.
But while simplicity may be the goal, in the meantime, the API split is expected to be "extremely complex" and is seen as a test for Hudson, a source told Reuters.