Sanofi mulls sale of older drugs - trade unions

Wed Jun 25, 2014 4:28pm EDT

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By Noëlle Mennella

PARIS, June 25 (Reuters) - French drugmaker Sanofi is in the "very early stages" of considering the sale of a portfolio of older drugs, managers told an internal meeting on Wednesday, according to union representatives who were present.

People familiar with the matter had told Reuters in April that Sanofi was looking to part with drugs that could fetch $7-8 billion as it seeks to shed non-core assets and focus on high-growth areas.

A spokesman for Sanofi said on Wednesday the group did not comment on "rumours or speculation".

CGT union representative Thierry Bodin told Reuters that Sanofi French human resources head Francois de Font-Reaulx had referred to "a reflection on an international level" about a sale of its older drugs.

A CFDT union representative added that Font-Reaulx had said a sale process had not yet been started.

The drugs for sale include treatments for high blood pressure and cardio-metabolic diseases and account for roughly $3.7 billion in combined annual revenue, one of the people familiar with the matter told Reuters in April, adding that the portfolio could fetch up to twice that amount.

Drug companies are increasingly looking to shed smaller divisions they view as non-core so they can better focus on their mainstay products. They have also shown willingness to consider large asset swaps with rivals to exit weaker businesses and reinforce core areas where they are already top players.

The union representatives said Sanofi had also decided to group its dengue vaccine activities into a separate unit, as well as creating a division for biologics, or medical products made from living organisms.

Sanofi expects final clinical results on its vaccine against dengue, the world's fastest-growing tropical disease, by late September, and analysts estimate annual sales could reach a billion euros ($1.36 billion).

The Sanofi spokesman said he could not go into detail about its dengue vaccine production plans at this stage, although he confirmed the plans for a biologics unit.

"To support the increasing focus of the company on Biologics, Monoclonal Antibody treatments and the upcoming product launches, we have decided to adapt our organisation and create a Biologics Division," he said.

The CGT's Bodin added that unions considered Sanofi was in the process of separating the group into units that could be "sold, merged, swapped", against a background of increased merger-and-acquisition activity in the pharmaceuticals sector.

Novartis and GlaxoSmithKline agreed to trade more than $20 billion worth of assets in April, while Pfizer eventually abandoned its attempt to buy AstraZeneca for nearly $118 billion last month. ($1 = 0.7335 Euros) (Editing by Andrew Roche)

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