French pharmaceuticals giant Sanofi announced today (27 October) that it intends to spin out its consumer healthcare division, initially created in 2019.
The news was somewhat buried in a broader press release regarding the company’s ‘Play to Win’ growth strategy.
Announced in 2019, soon after the company appointed Paul Hudson as CEO, the strategy appears to be delivering success. According to GlobalData intelligence, Sanofi had modest sales growth of 4.83% in 2020-21 followed by growth of 15.86% in 2021-22. Sanofi itself reports that it has seen 13 consecutive quarters of growth.
The company’s current Consumer Healthcare Global Business Unit has a presence in 150 countries and over 11,000 employees. The current Executive Vice President, Julie van Ongevalle, noted the “increased agility and flexibility to grow our portfolio of brands” that the spin-out will give the new company. The separation is expected to take place in Q4 2024 at the earliest.
Sanofi is following in the footsteps of Johnson & Johnson, Pfizer, and Novartis, all of which have spun out their generics or consumer health brands in recent years.
In the press release, Sanofi also announced that it is pursuing new efficiency initiatives within its biopharma business area, aiming at €2bn ($2.12bn) in savings from 2024 to the end of 2025. It is also increasing investment in research and development (R&D) to “further prioritis[e] first and or best in class medicines”, according to R&D head Houman Ashrafian.
Sanofi had the ninth highest deal value of any pharmaceuticals firm in October 2022-2023, totalling $9.42bn, so it is no stranger to making big plays.
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