London/Hong Kong: Sanofi is holding discussions over options for its consumer-health business that could be worth $30 billion as new chief executive officer Paul Hudson seeks to rejuvenate the French drugmaker, people familiar with the matter said.
While the pharma giant has made no decisions, it has been talking to financial advisers to gauge shareholder feedback, according to the people, who asked not to be identified because the deliberations are private. Hudson, who has said he will take a critical look at all of Sanofi’s operations, will give a strategy update on 10 December.
Sanofi shares rose as much as 2.9% in Paris, reversing an earlier decline, for their biggest intraday gain in four months. A review of the business that owns Allegra allergy tablets, Rolaids antacids and Dulcolax laxatives could lead to deals including a spinoff or merger—an approach several rivals have already pursued with their consumer-health units. Such a move could help Sanofi focus on fast-growing areas such as cancer and gene therapy.
Sanofi could also decide to hang onto the unit, the people said. That would help the company deal with another potential challenge — global pressure on drug prices—by keeping its revenue stream more diversified.
All businesses are undergoing thorough reviews at the moment, according to the Paris-based company. The consumer-health unit generated more than $5 billion in revenue last year. It competes with a similar division at Bayer AG, which doubled down in the field when it bought Merck & Co.’s over-the-counter operations in 2014, gaining brands such as Claritin. Both Novartis AG and GlaxoSmithKline Plc have recently narrowed their focus on cutting-edge prescription drugs.
Led by CEO Emma Walmsley, Glaxo pooled its consumer assets with those of Pfizer Inc., paving the way for a split into two companies, one focused on pharma and vaccines and the other dedicated to over-the-counter brands. Novartis’s Vas Narasimhan spun off the drugmaker’s Alcon eye-care division and ditched a stake in a consumer-health venture as it bets on targeted products like a gene therapy for a rare but devastating muscle disease.
Hudson, a former executive at Novartis and AstraZeneca Plc, is also grappling with questions about the future of Sanofi’s diabetes unit, along with its pipeline priorities and acquisition plans. He’s weighing the options with new head of research John Reed as well as chief financial officer Jean-Baptiste Chasseloup de Chatillon, who held the same job at PSA Group, the French manufacturer of Peugeot cars, before joining Sanofi last year.bloomberg