Sanofi has a name for its ingredients spinoff, taps Centrient head Karl Rotthier as first CEO
As part of CEO Paul Hudson’s mission to revamp the company’s strategy around oncology and immunology R&D, Sanofi unwrapped plans in February to hive off its legacy API business. But Sanofi wants to maintain its EU heritage for the new company, and now has a name and new leader to move the spinoff ahead.
Sanofi will name its active pharmaceutical ingredients spinoff EuroAPI, a nod to the company’s roots in the EU and planned operations home base for what will be the second largest ingredients producer in the world, Sanofi said in a release.
Hoping to drive its way to $1.22 billion in sales by 2022, Sanofi has tapped former Centrient Pharmaceuticals CEO Karl Rotthier, a 29-year veteran of biopharma, to take the lead role at the new company. EuroAPI stands to become the world’s single largest producer of small molecule API and second-largest API producer overall when it launches its planned French IPO in 2022, Sanofi said.
Rotthier will help corral what is expected to be an initial workforce of 3,200 employees working across six Sanofi sites in Italy, Germany, the UK, France and Hungary. The company’s initial portfolio will come with more than 200 APIs approved for products in 80 international markets.
Sanofi announced the API spinoff in February 2020 as the French drugmaker looks to pivot its resources around oncology and immunology development and away from the historically low-margin API game. However, Sanofi isn’t totally walking away: The drugmaker will hold a 30% investment stake in the spinoff and will allocate enough capital to keep the newco debt-free with “optimal conditions for success,” the drugmaker said in a release.
With its place near the top of the field ensured, EuroAPI will look to secure roughly 6% annual growth each year, Rotthier said in a statement. The company will position itself as an EU-based alternative in an API market largely dominated by ingredients produced in India and China.
Unlike the US, which has been engaged in a running trade war with China during the Trump administration, the EU has worked more closely with the East Asian country on economic policy. However, Covid-19 disruptions have highlighted the need for redundant supply chains for pharmaceuticals in Western nations.
Without its API business on board, Sanofi is realigning its mission under the leadership of CEO Paul Hudson, hoping to center its business growth around its blossoming oncology portfolio and blockbuster immunology med Dupixent, a partnered drug with New York’s Regeneron. Sanofi is projecting around $12 billion in sales for Dupixent, which has seen billions in sales so far tied to its approval in atopic dermatitis, or eczema.