Sanofi, the French drug giant, said Monday that it would spin off a new company that will create the active chemical ingredients for drugs, expanding into a market currently dominated by firms in China and India.
Sanofi plans an initial public offering for the new firm, which will be based in France and which is forecast to have sales of 1 billion euros in 2022.
The need for such a company is being brought “sharply into focus” by outbreaks of a novel coronavirus that threaten pharmaceutical supply chains, Paul Hudson, Sanofi’s CEO, told STAT. Right now, he said, 60% of active pharmaceutical ingredients come from China, and 13% come from India.
“The industry needs to be able to make active pharmaceutical ingredients in Europe,” Hudson said. “And if you’re going to do it, let’s do it properly.”