- Sanofi will float its drug manufacturing business on the French stock exchange on May 6, announcing Friday its intention to list shares in the spinout on Euronext Paris, pending an upcoming shareholder meeting.
- The French pharmaceutical company will retain a 30% ownership stake in the spinout, dubbed EUROAPI, and plans to distribute 58% of the new business' share capital via a dividend to its existing shareholders. Epic Bpifrance, a French government investment fund, will own the remaining 12%.
- Sanofi announced plans in February 2020 to spin out some of its drug manufacturing into a separate entity as part of a company-wide restructuring under CEO Paul Hudson. The new business will take with it six Sanofi factories, as well as roughly 3,300 employees. Sanofi expects sales for EUROAPI will total about 1 billion euros, or around $1.1 billion, this year.
Sanofi's drug manufacturing spinout is one of many recent examples of large pharmaceutical companies restructuring, slimming down or otherwise prioritizing resources toward branded prescription drugs.
Pfizer and Merck & Co. have spun out their generic and legacy drug products into new companies, while Novartis has said it's considering doing the same with its Sandoz unit. Johnson & Johnson is splitting in two, hiving off its consumer health business from its pharmaceutical and medical device units, and GlaxoSmithKline is set to separate ties with a consumer health joint venture it runs with Pfizer.
Sanofi's plans are on a smaller scale, although it laid out expectations Friday for EUROAPI to become a top five contract development and manufacturing organization by 2025, behind much larger CDMOs like Lonza and Thermo Fisher.
The new company will operate out of factories located in the U.K., France, Germany, Hungary and Italy, and will specialize in the active pharmaceutical ingredients contained in small molecule drugs.
Per the planned distribution plan, which will be put to a shareholder vote at a May 3 meeting, Sanofi will distribute one share of EUROAPI for every 23 shares held by the pharma's investors. Sanofi and Epic Bpifrance have both committed to hold onto their ownership stakes of 30% and 12%, respectively, for at least two years, while L'Oreal, Sanofi's largest shareholder, won't sell the stock it receives for at least one year.
As a result of the spinout, and Sanofi no long owning the EUROAPI business, the company expects a "slightly accretive" impact to its operating profit margin this year.