French drugmaker Sanofi plans to establish a new major active pharmaceutical ingredients company that it says would secure significant manufacturing and supply capacities that are critical for patients in Europe and beyond and help balance the industry’s heavy reliance on APIs sourced from Asia.

According to the CPA Industry Report of 2019, around 60% of the worldwide API production volume is located in China and India.

The standalone company headquartered in France would combine Sanofi’s API commercial and development activities with six of its European API production sites, located in Brindisi, Italy; Frankfurt, Germany; Haverhill, UK; St Aubin les Elbeuf, France; Újpest, Hungary; and Vertolaye, France. These sites are already part of the manufacturing network of the business unit Sanofi Active Ingredient Solutions. Sanofi Active Ingredient Solutions was created in October 2018 from the former CEPiA business after the pharmaceutical group sold its European generics activities Zentiva to Advent International. The name CEPiA was the abbreviation for "Commercial & External Partnership, Industrial Affairs".

The as yet unnamed player with 3,100 skilled employees and projected sales of €1 billion by 2022 would rank second globally, the French pharma company said. Tentative plans call for floating the new API producer on the Euronext stock exchange in Paris, with a decision to be made by 2022, subject to market conditions.

Sanofi said the company in which it would hold a 30% stake would have a broad portfolio of both volume and niche products, high standards of quality, competitive pricing, state-of-the-art industrial capabilities and technologies across Europe.

The drugmaker said it intends the new company to be debt free in order to maximize its future investment capacities, and is committed to remaining a long-term customer relationship. 

Philippe Luscan, Sanofi’s executive vice president, Global Industrial Affairs, said the standalone supplier “would be agile and able to unlock its growth potential, especially in capturing new third-party sales and all the opportunities of a market growing at a pace of 6% annually.”