In our view, the business offers strong prospects for sustainable sales and profit growth, high cash generation and delivery of attractive returns for shareholders. 1 Companys estimate based on third-party market research conducted using the annual reports published by the main industrial players in the APIs sector, public databases (including Capital IQ and Orbis) as well as interviews with market experts. The split, J&J said, would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers. By Mark Terry. Paul Hudson, Sanofis chief executive officer, who took over the reins of the company on September 1, is expected to meet with investors in Cambridge, Massachusetts on December 10. The company, which is facing some notable patent expirations in the coming few years, has announced a plan to spin off its consumer healthcare business in 2023. Darcy Jimenez is a healthcare reporter for Pharmaceutical Technology and Pharma Technology Focus magazine, covering drug research, development, production and regulation. Post transaction, Sanofi confirms that it will hold circa 30% of the share capital and voting rights of EUROAPI and will remain a long-term strategic partner, supporting EUROAPIs growth ambitions as an independent company over the coming years. We believe the separation could be a trigger for driving improved share price appreciation, given that the stock has underperformed peers historically. Deal Overview. At its third-quarter financial report on October 31, Sanofi reported total net sales of 9.499 billion for the quarter, with Consumer Healthcare reporting 1.136 billion, up 0.4%. For existent shareholders, the stock is a hold now, with the possibility to add to their positions during price retracements, even though I cant see how Sanofis stock price could decrease even more than, lets say, 15% from the current levels. Sanofi, which has been carving out its consumer group into a separate business since 2019, remains wedded to the unit after a restructuring helped it return to growth last year. About Sanofi The Consumer Healthcare unit had two major deals in 2018, when GSK acquired Novartis' 36.5% stake in its consumer healthcare joint venture (JV) followed by a merger with Pfizer's consumer healthcare business into a JV. Total Pharmaceuticals reported 6.434 billion, Sanofi Pasteur (Vaccines) reported 1.929 billion. In 2017, Sanofi completed a swap announced in June 2016, with Germanys Boehringer Ingelheim. Arguably the most well-known J&J product is its Covid-19 vaccine offering; the companys one-shot jab is the only single-dose coronavirus vaccine on the market, and is sold on a not-for-profit basis. At the time, Hudson stated, Since joining Sanofi only two months ago, I am increasingly excited about the strength of our businesses, our ability to develop transformative medicines and the diverse talent of our teams across the organization. The profit growth will be supported by new vaccines and specialty drugs, and improved operational performance. . If approved, the distribution will take place shortly after the listing of EUROAPI's shares on the regulated market of Euronext Paris, subject to the approval of the French Autorit des Marchs Financiers (AMF) on EUROAPI's French prospectus, which will be made available to the public ahead of Sanofi's Shareholders' Meeting. In addition to the previously proposed 3.33 cash dividend per Sanofi share, this additional extraordinary dividend, exclusively in kind, is subject to shareholders approval at Sanofi's May 3, 2022 Ordinary and Extraordinary Shareholders' Meeting. The rationale is that the company, whose innovation engine has been strongly reliant on its relationship with Regeneron Pharmaceuticals, would be able to invest the proceeds into more internal research. J.P. Morgan & Cie S.A.S. In 2018, Pfizer split itself into three business units after failing to sell off its consumer health segment. The company has also claimed that some of its major shareholders support the spin-off deal. Please contact the Global Headquarters in France . In addition to its highly diversified customer base of approximately 530 customers, EUROAPI benefits from a strong and long-term customer relationship with Sanofi, which represented nearly half of EUROAPIs revenues in 2021. Merck sold its consumer business to Bayer AG in 2014 for $14.2 billion. Real-time Euronext Paris Day by day, evidence shows that vaccines will be much needed in order to fight Covid outbreaks, even in 2022, and, despite my first cold expectations, the financial margins for them seem to be substantial, although there could eventually be an excess in authorized vaccines, which would lead to lower prices and profits. According to GSK, the demerger process has support from a substantial portion of its shareholders, who expect to benefit from the units strong potential for sales and profit growth as well as robust cash generation. Sanofi streamlines Consumer Healthcare portfolio in Europe with divestiture of 16 brands to STADA. "It's very significant, we are really reallocating our cost base towards innovation on science," the CFO said. Sanofi shareholders will receive one EUROAPI share for 23 shares held in the parent company, and Sanofi plans to keep a 30% stake in EUROAPI. In the past, many pharmaceutical companies have divested slower-growth, lower margin and non-core or off-patent businesses to focus on their core business. Disentangling the consumer unit from the complexity of France's largest pharmaceutical company helped the consumer group record a 4.6% year-on-year rise in 2021 sales, CEO Paul Hudson said. Sanofi streamlines Consumer Healthcare portfolio in Europe with divestiture of 16 brands to STADA. I am not receiving compensation for it (other than from Seeking Alpha). Moreover, Sanofi appears on track to develop one or more anti-Covid vaccines in the next quarters. The patent stays until 2035 to 2039 (oral form). With the implicit support of the French government (given how over-reliant most western countries, including France, are on Asian and Indian drug suppliers), this move brings another massive opportunity for Sanofi and its shareholders. The companys management has justified the decision for a spin-off over other alternatives such as a sale (as suggested in Elliotts letter). When Sanofi unveiled plans to spin off its European active pharmaceutical ingredient (API) unit back in early . We are pleased these products will continue to be available for consumers as we focus on becoming a fully integrated standalone business said Julie Van Ongevalle, Executive Vice-President, Sanofi and Head of Sanofi Consumer Healthcare. The earnings report showed what GSK called "strong sales" in its biopharma and consumer healthcare operations, to the tune of 7.1 billion British pounds (about $8.9 billion) and 2.6 billion . In addition to the previously proposed 3.33 cash dividend per Sanofi share, this additional extraordinary dividend, exclusively in kind, is subject to shareholders approval Low Back Pain (LBP) continues to be the leading reason for Years Lost to Disability (YLTD) in every region of the world, The Global Social and Economic Value of Self-Care 2022 Report, Economic burden of inadequate management of allergic diseases in the European Union: a GA(2) LEN review, Worldwide prevalence and burden of functional gastrointestinal disorders, results of Rome Foundation Global Study, A systematic review of the global prevalence of low back pain, Bauer C, May U, Giulini-Limbach C, Schneider-Ziebe A (2022), Zuberbier T, Ltvall J, Simoens S, Subramanian SV, Church MK (2014), Sperber AD, Bangdiwala SI, Drossman DA, et al. As of 31 December 2020, STADA employed 12,301 people worldwide. GSK owns 68% holding in the JV while Pfizer owns 32%. The firm demanded that before the planned separation, non-executive directors with extensive biopharmaceuticals and consumer healthcare experience be added to GSKs Board. Home . We are committed to providing world-class products and services that help manage energy, stress, sleep and anxiety. Sanofi Pharma; Sanofi Genzyme; Sanofi Pasteur; Our data sharing commitments; Managed Access Programs (MAPs) . Josephine Fubara About STADA Arzneimittel AG The consensus recommendation is Strong Buy, based on a survey of 18 . We wanted it to be a fast-growing consumer health business [and] to explain to the market why we thought we were the best owner.". > Add the event to my calendar, Cowens 43rd Annual Health Care Conference My holding period is ideally "forever", even though I can't exclude to make some changes from time to time. Sanofi said on Tuesday it hopes to take over the consumer health care unit of German peer Boehringer Ingelheim via an asset swap, making the French pharmaceutical giant the sector's world leader. While cough is the most common symptom of a cold, people can experience up to five symptoms during the life cycle of a cold. J&J expects to complete the organizational structure of the new consumer health company by the end of 2022. As part of Sanofi's ongoing efforts to reduce the complexity of its Consumer Healthcare portfolio and accelerate its growth trajectory, the company has signed an agreement with STADA for the divestiture of 16 Consumer Healthcare products commercialized in Europe. The net debt/adjusted EBITDA leverage ratio is expected be less than 2x. Elsewhere, Sanofi said it expects trials of the COVID-19 shot being developed in conjunction with GSK to read out later this quarter, while a late-stage vaccine for respiratory syncytial virus developed with British COVID-19 vaccine-maker AstraZeneca PLC is expected to be filed with regulators this year. The firm created a new subsidiary to deal with the talc-related litigation, before filing for the new companys bankruptcy in an attempt to block claims for damages from those who say J&Js baby powder damaged their health. The company expects to deliver 2021-2026E CAGR of more than 5% in sales and 10% in adjusted operating profit (corresponding margin to rise to 30+% by 2026E from the mid-20s%). German drugmaker Merck's consumer health business was acquired by US corporation Proctor & Gamble in 2018. Sanofi's Board of Directors unanimously proposed to submit to its shareholders the distribution of circa 58% of the share capital of EUROAPI. The new Primary Care unit was to focus on mature markets. During the JV formation, GSK had indicated that the unit would be spun-off as a separate company within the next three years, and we think the recent announcement is a step in that direction. Our mission is to Serve Healthier, Fuller Lives by offering moments of relief to our Patients & Consumers in our key platforms, including Allergy, Physical & Mental Wellness, Pain . In November 2021, Johnson & Johnson announced it would also split off its consumer . Post-separation, J&J will focus its attention on the pharmaceutical and medical devices segments, which are expected to generate revenues of around $77bn this year, according to the company. The . I am encouraged by the organizations early achievements in our efficiency initiatives, which will allow us to further drive innovation in our business., 1985 - 2023 BioSpace.com. Start Now! Sanofi will look to offload around 150 OTC brands as part of a radical overhaul of its Consumer Healthcare operation. Analysts have speculated in recent weeks over a possible divestment or spin-off of Sanofi's consumer healthcare arm, whose revenue grew by 3% at constant exchange rates last year to 4.7 billion . Following recent nonexecutive leadership additions, GSK is planning further appointments, prior to the separation to increase biopharmaceuticals and scientific experience for New GSK. -. This press release does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in France, the United Kingdom, the United States of America, Canada, Australia, Japan or any other jurisdiction. Drawing on more than 150 years of experience in the growing API market, EUROAPI has a network of six production sites, all of which are located in Europe, and delivers around 200 APIs to approximately 530 customers in over 80 countries. Sanofi provides healthcare solutions in over 150 countries. Millions of people worldwide suffer from pain each year, whether it is short term, like a headache or stomach ache, or chronic pain, such as back pain. "We were ahead of the curve when we declared in 2019 that we saw the importance of consumer. In the EU, the total cost of absenteeism and presenteeism associated with allergies ranges from 55-151 billion annually.
Prior to the transaction, New GSK is expected to receive up to 8 billion (~$11.0 billion) from the Consumer Healthcare unit. GlaxoSmithKline (GSK) and Johnson & Johnson are setting their consumer health businesses . I have developed a broad set . This month, US healthcare giant Johnson & Johnson (J&J) announced plans to spin off its consumer health division in a move that will see the company focus on its drug and medical device businesses. I wrote this article myself, and it expresses my own opinions. In addition, GSK is continuing with the restructuring and active portfolio management of its consumer-health division ahead of the spin-off, expected by late 2022. For medical information: medinfo.india@sanofi.com , customercare. <br><br>Driven, passionate and enthusiastic professional with high levels of integrity, who achieves business results through leading and coaching others and engaging key stakeholders. Unveiling his strategy after joining the drugmaker from Novartis AG in 2019, Hudson said Sanofi's focus would be on vaccines, research and development and Dupixent a psoriasis medicine that the CEO projects will exceed annual peak sales of 10 billion while exiting traditional areas of expertise like cardiovascular and diabetes research. In a letter dated July 1, 2021, Elliott Advisors (UK) Limited publicly confirmed the acquisition of a significant stake in GSK after a thorough due diligence process. investor.relations (at) sanofi.com. Low Back Pain (LBP) continues to be the leading reason for Years Lost to Disability (YLTD) in every region of the world,4 affecting around 1 in 10 people. While GlaxoSmithKline boasts a higher dividend yield at 5.4% than Sanofi's 3.6%, Sanofi . Employing over 100,000 workers, it generates over $42 billion in annual sales and is ranked at #288 in the Fortune 500. 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