BioPharma

Sanofi creates new European pharmaceutical ingredient supplier

Although the move is designed to lower dependence on Asian suppliers, a spokesperson said it was not connected with the coronavirus outbreak, which according to a report Sunday has caused fears at the FDA that supplies of about 150 drugs could be at risk.

By Alaric DeArment on February 24, 2020

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French drugmaker Sanofi is creating a new company to produce and market active pharmaceutical ingredients to third parties amid increased risks of drug shortages.

The new firm will be a standalone company headquartered in France and will combine Paris-based Sanofi’s API activities with six of its European production sites, the company said Monday. The European sites include two in France and one each in the UK, Italy, Germany and Hungary. The idea is to create a European API production company that would be able to supply capacities for the continent and beyond, while “balancing” the industry’s reliance on APIs from Asia, amid increasing drug shortages that affect patient care. The company would be the second largest supplier of APIs, with about 1 billion euros ($1.1 billion) in sales expected by 2022, at which time it could potentially go public.

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However, a spokesperson for Sanofi said via telephone that the plans for the new company, which has not yet begun operations, are not connected with the growing COVID-19 coronavirus epidemic, which began in China and has since caused major outbreaks in South Korea, Iran and Italy. The spokesperson could not say how long the plan had been in the works.

“Based on the expertise and experience built over decades within our industrial network, this new entity would help ensure greater stability in supplying drugs to millions of patients in Europe and beyond,” Sanofi executive vice president for global industrial affairs Philippe Luscan said in a statement. “With this endeavor, this new entity would be agile as a standalone company and able to unlock its growth potential, especially in capturing new third-party sales and all the opportunities of a market growing at a pace of 6% per year.”

Despite the lack of connection between the new company and the COVID-19 outbreak, that has created fears of drug shortages given many drugmakers’ reliance on China as a source for the ingredients used to make them.

On Sunday, Axios reported that the Food and Drug Administration has compiled a list of 150 prescription drugs that are at risk of supply shortages if the outbreak gets worse. The agency has reportedly been in touch with its European counterpart, the European Medicines Agency, as well as drug and device manufacturers. The outbreak has been creating jitters in the industry and was a major topic of discussion at a recent biotech industry conference.

Photo: grThirteen, Getty Images