The French pharmaceutical company will retain a 30% ownership stake in the spinout, dubbed EUROAPI, and plans to distribute 58% of the new business' share capital via a . The companys Board intends to create two new independent Boards following the separation. Josephine Fubara Partnered with business leaders to facilitate the Retired after 24+ year career with J&J. "As discussed during our Capital Markets Day in February, simplifying the CHC product portfolio is an important part of our strategy to focus our resources and efforts where we can bring the most value, especially to consumers. Builds strategic relationships, both internally . Moreover, the deal was in line with GSKs plan to demerge the JV from the company and to list the GSK Consumer Healthcare business on the UK equity market. The earnings report showed what GSK called "strong sales" in its biopharma and consumer healthcare operations, to the tune of 7.1 billion British pounds (about $8.9 billion) and 2.6 billion . We have extensive lines of prescription medicines and . There are certain watershed moments in every person's life that propel them to find a community. Incorporated in 1999, GlaxoSmithKline plc (GSK), a British company based in United Kingdom. It planned to form a new Primary Care global business unit that would combine the product portfolios from its existing Diabetes and Cardiovascular (DCV) unit with Established Products. Therefore, their poor performance affects the overall results: General Medicines declined by 9% and Consumer Healthcare by 14% YoY. content Welcome to Sanofi Consumer Healthcare. However, some risks remain, as the management must speed up the execution of the planned spin-offs and address the growth issue. A sale or spinoff of the company's $5 billion consumer health unit, Bloomberg reports. commercializing best-seller drugs. Our brands are trusted across the world, and some have been on the market for over 50 years. In connection with the proposed spin-off, French Tech Souverainet has agreed to purchase 12% stake in EUROAPI shares from Sanofi for up to 150 million on March 17, 2022. If you have an ad-blocker enabled you may be blocked from proceeding. FRANKFURT/PARIS (Reuters) - Sanofi <SASY.PA> is considering a joint venture or outright sale among options for its consumer healthcare unit, sources told Reuters, as the French drugmaker prepares to present a new strategic plan next month. Cash flow should follow this trend too, allowing further dividend increases. Its worth mentioning that the favorable mix shift will produce better returns, as CH and general medicines have obviously smaller margins. The CEO's review of the consumer unit coincided with a trend for pharmaceutical giants like Johnson & Johnson and GlaxoSmithKline PLC to simplify their diversified structures and double-down on lucrative franchises, such as cancer and rare disease, driven by pioneering science, data and technological advances. The transaction with STADA ensures that these products will continue to be available to consumers. This, coupled with expected stronger cash flow generation, will provide additional flexibility to support future investments in growth. > Add the event to my calendar, Cowens 43rd Annual Health Care Conference Take a look at highlights from our portfolio of self-care products. Forward-looking statements are statements that are not historical facts. Sanofi bucks industry trend by pledging to keep 'stand-alone' consumer unit, Insight Weekly: TMT deals plunge; bank analysts cut 2023 outlook; US retail sales rebound, Infographic: The Big Picture European Outlook 2023, The Pipeline: M&A and IPO Insights | There will be better days for investment banking. Sanofi is offering its animal health unit Merial in exchange for Boehringer's consumer health, or non-prescription drugs, business plus 4.7 billion euros ($5.2 billion) in cash in exclusive . As part of Sanofi's ongoing efforts to reduce the complexity of its Consumer Healthcare portfolio and accelerate its growth trajectory, the company has signed an agreement with STADA for the divestiture of 16 Consumer Healthcare products commercialized in Europe. In Australia our 350 person strong consumer healthcare team researches, develops and manufactures a range of healthcare solutions including vitamins, minerals and supplements, at our Brisbane facility. The French pharma giant first announced its intentions to spin off the API business in February.The plan, as the company said at the time, would combine Sanofi's API . Sanofi assumes no responsibility for the information presented on this website. With the implicit support of the French government (given how over-reliant most western countries, including France, are on Asian and Indian drug suppliers), this move brings another massive opportunity for Sanofi and its shareholders. Final note: I am long Sanofi directly through its shares listed in Europe. Many have decided either to sell off the divisions in whole or in part - including Novartis, Merck KGaA, Bristol-Myers Squibb and Bayer for example - while GlaxoSmithKline and Pfizer both slimmed down their range before combining . GSK is a research-based healthcare company, focused on developing, manufacturing, and marketing of human healthcare products. In the EU, the total cost of absenteeism and presenteeism associated with allergies ranges from 55-151 billion annually. Moreover, the failure to come out with a COVID-19 vaccine despite being one of the largest vaccine producers, may have led to investor disappointment. Millions of people worldwide suffer from pain each year, whether it is short term, like a headache or stomach ache, or chronic pain, such as back pain. Unveiling his strategy after joining the drugmaker from Novartis AG in 2019, Hudson said Sanofi's focus would be on vaccines, research and development and Dupixent a psoriasis medicine that the CEO projects will exceed annual peak sales of 10 billion while exiting traditional areas of expertise like cardiovascular and diabetes research. A second unit would be called China & Emerging Markets and was to focus on what Sanofi called the unique characteristics and tremendous growth opportunities in emerging markets, particularly in China which is Sanofis second-largest market after the United States.. Further details regarding the specifics of the distribution, including the parity, and the timetable of the spin-off will be set forth in EUROAPIs French prospectus. Employing over 100,000 workers, it generates over $42 billion in annual sales and is ranked at #288 in the Fortune 500. The digestive system provides energy and fuel for the whole body, so when someone suffers from gastro intestinal disorders, their life can literally be put on hold. However, net sales took a dive in Q1, declining by roughly 4.6% YoY (reported). 5 Ways to Connect Wireless Headphones to TV. Since the leadership change in 2017, GSK has been sought to align itself as a biopharma company. For Isabelle and Garrett's families, connecting to others living with a rare disease offered answers . GSK cited the opportunity cost from the immense profit and cash generation potential of the consumer healthcare unit as well as higher expenses in the form of taxes in case of a sale as compelling reasons for the spin-off. While GlaxoSmithKline boasts a higher dividend yield at 5.4% than Sanofi's 3.6%, Sanofi . Post transaction, Sanofi confirms that it will hold circa 30% of the share capital and voting rights of EUROAPI and will remain a long-term strategic partner, supporting EUROAPIs growth ambitions as an independent company over the coming years. In line with its Play to Win strategy aiming at simplifying its operations, Sanofi announced in February 2020 its ambition to create a new world leader in APIs to secure significant manufacturing and supply capacities that are critical for patients in Europe and beyond, in a context of increasing shortage of medicines essential to patient care. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. The joint venture was then spun off and listed separately. Culture and talent. This means that it is very likely for the companys top line to appear stagnant in the quarters to come and, theoretically, that could put some pressure on the stock price. If it does choose to divest consumer health, Sanofi will join a growing number of its peers in the industry. In addition, GSK is continuing with the restructuring and active portfolio management of its consumer-health division ahead of the spin-off, expected by late 2022. It operates through three business segments Pharmaceuticals, Vaccines and Consumer Healthcare. I have developed a broad set . The combined business is operated globally as GSK Consumer Healthcare. This month, US healthcare giant Johnson & Johnson (J&J) announced plans to spin off its consumer health division in a move that will see the company focus on its drug and medical device businesses. In connection with the proposed spin-off, French Tech Souverainet has agreed to purchase 12% in EUROAPI shares from Sanofi for up to 150 million, with the acquisition price to be determined based upon the thirty day volume weighted average trading price ("VWAP") of EUROAPI's shares on Euronext Paris, starting on the first day of trading. Self-care can enhance wellbeing, prevent disease, curb illness, and restore health. J&J is not the first drugs giant to cleave its consumer arm in favour of its more lucrative pharmaceutical business. Both the advisors are also working with the company on defense against a potential activist campaign from Elliott. GlaxoSmithKline plc (GSK) today announced that the new company, to result from the proposed demerger of Consumer Healthcare from GSK in mid-2022, will be called Haleon. Johnson & Johnson, Bayer and Sanofi, according to Reuters, are close competitors in the consumer healthcare market. As a health journey partner, we aim to empower consumers to live healthier and fuller healthier lives through a full range of holistic pain management solutions. Following the AMFs approval of EUROAPIs French prospectus, Sanofi and EUROAPIs management teams will host a dedicated Capital Markets Day on April 1, 2022 at 1:30 pm CET to present EUROAPIs business in greater detail (event registration details are available here). with a decision due by the end of the year. Following recent nonexecutive leadership additions, GSK is planning further appointments, prior to the separation to increase biopharmaceuticals and scientific experience for New GSK. esgSubNav, Discover more about S&P Globals offerings. Notice to holders of American Depositary Receipts (ADRs) Total Pharmaceuticals was up 1.5%, whereas Vaccines was down 9.8%, with total net sales down 1.1%. If you wish to continue to this external website, click Proceed. Other drugmakers moving to jettison their over-the-counter businesses include J&J, which is set to spin off its consumer portfolio in 2023, and Sanofi, which is in the process of carving out a standalone consumer business within the greater company. Other commercial successes in J&Js pharma portfolio include inflammatory disease therapy Stelara, which reaped $7.7bn in revenue last year; monoclonal antibody Darzalex for the treatment multiple myeloma; lymphoma and chronic graft-versus-host disease drug Imbruvica, developed with AbbVie; and antibody-based plaque psoriasis treatment Tremfya. The company expects a strong drug pipeline, backed by strong research and development expenses to drive sustainable, long-term growth for the pharmaceutical business. Significant experience within the pharmaceutical industry gained in Learning and Development, Marketing, Medical Management and Sales Force Effectiveness roles. This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. I am not receiving compensation for it (other than from Seeking Alpha). In the first quarter, the Specialty Care division grew at a pace of more than 7% YoY, while Vaccines fractionally grew by 0.7%. On the other hand, the remaining part is progressing nicely. In November 2021, Johnson & Johnson announced it would also split off its consumer . | As part of its quest to streamline consumer healthcareand eventually spin off the unit as a standalone businessSanofi will offload 16 consumer health products to Germany's Stada . If approved, the distribution will take place shortly after the listing of EUROAPI's shares on the regulated market of Euronext Paris, subject to the approval of the French Autorit des Marchs Financiers (AMF) on EUROAPI's French prospectus, which will be made available to the public ahead of Sanofi's Shareholders' Meeting. 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