2023-10-30 15:58:52
The Consumer Health activity covers food supplements and various products sold without a prescription such as Mucosolvan for coughs or the very popular paracetamol Doliprane. The laboratory wants to refocus on innovation and more lucrative drugs.
Sanofi will separate from its Consumer Health division by listing it on the stock market in 2024 to focus on new growth drivers that it wants to finance through a savings plan, announcements very poorly received by the markets. Names well known to the general public such as Mucosolvan against cough, Allegra against rhinitis, or the very popular paracetamol Doliprane will leave the fold of the French laboratory following this major strategic movement.
The French pharmaceutical giant has decided to make Consumer Health “an autonomous global commercial entity within the group” through “the creation of a listed entity whose headquarters will be in France”, he announced Friday on the occasion of the presentation of its quarterly results. The separation could be carried out “no earlier than the fourth quarter of 2024”.
Low prices and no big margin
Although they represent 12% of Sanofi’s turnover, consumer products are sold at low prices which do not allow significant margins to be achieved. In addition, they are in the sights of the executive who regularly considers reducing their price, their reimbursement level or the deductible within the framework of the PLFSS as was the case this year.
More than three years after the presidential announcement of a state envelope of 200 million euros for relocalize the production of paracetamol in France, new investments worth 20 million euros have just been unveiled for the Lisieux site in order to produce more Doliprane there. But the laboratory’s future investments will no longer be directed towards this Consumer Health division which will enjoy a certain autonomy.
Consumer Health sales up 4.6% in the third quarter
The objective for Sanofi is to accelerate innovation after having stopped research in the very competitive diabetes and cardiovascular sector, and before the loss of the patent, in 2031, blockbuster Dupixent, which treats various illnesses and whose succession must be prepared. Sanofi has increased its R&D spending by more than a billion per year since 2019 and the arrival of Briton Paul Hudson at the helm, the group indicated this summer.
The biopharmaceutical segments include specialty medicine, general medicine and the vaccines business while the Consumer Health business covers food supplements and various products sold without a prescription. There is Mucosolvan for coughs, Allegra for rhinitis, the Novanuit brand for sleep and the very popular paracetamol Doliprane to relieve pain. In the third quarter, sales of this division, present in 150 countries with more than 11,000 employees, were up 4.6%, supported by products related to digestion and allergies, or 1.245 billion euros (at i.e. more than 10% of turnover).
The precedent of the British GSK
At the same time, Sanofi is targeting savings of up to 2 billion euros between 2024 and the end of 2025 and ensures that “the majority will be reallocated to financing innovation and growth engines”. But these changes also result in the abandonment of short-term financial objectives, such as profits for 2024 and margin in 2025, mention Stifel analysts.
“We are strengthening our R&D investments and taking steps to become a biopharmaceutical pure player, while further optimizing our cost structure,” said Paul Hudson, CEO of Sanofi.
For Matthieu Sainton, health manager at the consultancy firm Eurogroup Consulting, the choice of a split seems “logical” in this sector “very competitive in terms of margin” which operates on “a volume strategy”. Sanofi is applying, according to him, “what others have already done”. Britain’s GSK spun off its consumer care business a year ago, which debuted in July 2022 on the London Stock Exchange under the name Haleon.
The group’s quarterly turnover fell 4.1% to 11.964 billion euros, an amount below the 12.089 billion expected according to the consensus polled by the financial agency Bloomberg. The success of the launch of Beyfortus (nirsevimab), a new preventive treatment against bronchiolitis in babies, available in four countries including France, has offset the decline in flu vaccines.
The pharmaceutical group also forecasts adjusted earnings per share (EPS) of activities in 2024 “roughly stable” compared to 2023 levels, due to the increase in research and development expenses and a rate of higher taxation. In 2025, however, he expects “a strong rebound” in the growth of the EPS of activities.
Top Articles
1698685058
#Sanofi #separating #Consumer #Health #division #produces #Doliprane