Sanofi (NASDAQ:SNY) plans to sell most of its stake in longtime partner Regeneron Pharmaceuticals (NASDAQ:REGN). The French drugmaker currently owns 20.6% of the American biotech -- about 23.2 million shares.

Regeneron and Sanofi currently co-market eczema treatment Dupixent, rheumatoid arthritis treatment Kevzara, and cancer treatment Libtayo. And the companies have a long-term pact to develop additional drugs. None of that will change after Sanofi sells its shares.

Pen and magnifying glass on a balance sheet

Image source: Getty Images.

Instead, the decision seems to be tied to Sanofi's desire to raise capital. Regeneron plans to repurchase $5 billion of Sanofi's shares about 8.8 million or so; the rest will be sold to the public, potentially generating around $13 billion for Sanofi.

Sanofi plans to hold onto a token 400,000 shares "in support of the ongoing collaboration with Regeneron." Reducing its ownership to that minimal level will allow Sanofi to stop accounting for its stake in Regeneron, which Sanofi estimates will result in its earnings per share EPS growing by 5% year over year in 2020 at constant exchange rates.

Shares of Regeneron were down 4.2% at 12:39 p.m. EDT on Tuesday, presumably because some investors have been hoping -- for a really, really long time -- that Sanofi would acquire Regeneron. While the chances of a buyout at a premium are reduced, the share repurchase will boost Regeneron's EPS, and if the partnership truly remains intact, it really doesn't matter whether Sanofi or other investors own the rest of those shares.