Strategic independence on health products, public support and European production. The project, announced two years ago, ticks all the boxes in the current circumstances. Sanofi clarified the terms on Friday, April 1. Its subsidiary Euroapi, which produces the active ingredients of drugs – that is to say the molecules providing their therapeutic properties – will be listed on the Paris Stock Exchange on May 6. The group will retain 30% of the capital and the State will hold 12%, via “French Tech Sovereignty”, a fund managed by Bpifrance, which was created at the start of the Covid-19 crisis.
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Euroapi will hold a portfolio of approximately 200 active ingredients currently produced by Sanofi, which it also sells to its competitors for nearly half of the volumes. For the French laboratory, the independence of its subsidiary would be a guarantee of growth, because some customers would limit their orders to depend less on Sanofi.
World number two
Euroapi is counting on an increase in its activity of 6 to 7%, i.e. double the current rate, thanks to the largest portfolio of chemical active ingredients in the sector, explains its president Karl Rotthier. According to him, the company will thus contribute to securing Europe’s supply capacities for active ingredients and will bring balance to the continent in an industry highly dependent on Asia. In 2019, 60% of volumes came from China and India. The global market is valued at 70 billion dollars (63 billion euros), but remains highly fragmented.
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This operation allows Sanofi to refocus on the research and production of innovative treatments, in particular drugs derived from biotechnology, even if it remains one of the rare laboratories to manufacture itself three quarters of the active ingredients it uses for his medications.
580 million euros of investments
With 1 billion euros in turnover expected in 2022, Euroapi, whose headquarters will be in Paris, will become the world number two in the sector, behind the Swiss Lonza, and will have 3,350 employees. The company has six factories, out of the eleven that Sanofi has in active ingredients. Two are in France – in Elbeuf (Seine-Maritime) and Vertolaye (Puy-de-Dôme) – one in Italy, one in Germany, one in Hungary and another in Great Britain.
An envelope of 580 million euros of investments is planned between now and 2025, half of which in France. In Elbeuf, for example, vitamin B12 production capacity will be increased. The site is the only one outside of China to manufacture it.
Euroapi will still work at 45% for Sanofi, which has agreed to keep orders for five years. A provision that worries the unions of Sanofi, who do not see favorably what they consider as a disengagement of the group in the active principles.