Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Sanofi Spins Off an Industry-Leading Business

By Cory Renauer - Jan 12, 2021 at 2:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After divesting its active pharmaceutical ingredient segment, the slimmed-down company will have more time to focus on developing new blockbuster drugs.

Sanofi's ( SNY -1.30% ) long-running transition from a traditional big pharma to a focused developer of new drugs took another big step forward on Tuesday, when it chose Euroapi as the official name of its active pharmaceutical ingredient (API) manufacturing spinoff.

Euroapi will hit the ground running with a portfolio of more than 200 APIs and annual sales expected to reach $1.2 billion in 2022. In the highly fractured industry for APIs, Euroapi will be the top-ranked manufacturer of small-molecule APIs and the world's second-largest API manufacturer overall.

Scientist measuring something.

Image source: Getty Images.

Sanofi will retain a 30% stake of Euroapi, but the spinoff will assemble a new management team to be led by Karl Rotthier, a former CEO of Centrient Pharmaceuticals. His appointment will allow Sanofi to focus on the development of new drugs.

Yesterday, Sanofi acquired a cancer therapy developer called Kymab for $1.1 billion up front. This gives Sanofi rights to Kymab's OX40-directed antibody KY1005, a potential new treatment for eczema that produced compelling results in a phase 2 trial last August.

Sanofi is enjoying great success with an eczema treatment that launched a few years ago called Dupixent. Developed in partnership with Regeneron ( REGN 0.18% ), Dupixent is currently generating about $4 billion in annual sales.

Sanofi thinks Dupixent sales will surpass $12 billion at its peak, if the company can pilot its blockbuster through some label-expanding drug approvals. With this in mind, diverting fewer managerial resources to run an API business seems like the right move.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sanofi Stock Quote
$47.07 (-1.30%) $0.62
Regeneron Pharmaceuticals, Inc. Stock Quote
Regeneron Pharmaceuticals, Inc.
$635.16 (0.18%) $1.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.