Sanofi is spreading its wings in India

Sanofi is growing through acquisitions

Sanofi is concentrating on paediatric vaccines
Sanofi is concentrating on paediatric vaccines | Source

Focussing on OTC products

Largest vaccine plant in the world to come up in Hyderabad

Sanofi Aventis, the French pharmaceutical major, has decided to put up the biggest vaccine manufacturing facility in Hyderabad, the pharma capital of India. It may be noted that Sanofi acquired the Indian vaccine manufacturing company Shantha Biotech in 2010 and is involved in a tax dispute with the tax authorities of India. The new plant in Hyderabad will be Sanofi’s biggest vaccine facility in the world. Christopher A Viehbacher is the CEO of Sanofi. The new facility will become operational in 2013. Sanofi has planned to generate 40% of its revenue from the emerging markets by the year 2015.

Sanofi has 3 manufacturing facilities in India

In a parallel operation, Sanofi will be investing more in Shantha Biotech also in creating latest vaccine and biotech platform. Shantha Biotech is headquartered in Hyderabad. Sanofi has already invested $300 million for the last three years in increasing facilities in Shantha Biotech. Last September, World Health Organization had pre-qualified Shantha Biotech’s tetanus and cholera vaccines. Sanofi is also planning to kick off an animal vaccine facility in private public partnership mode. Sanofi is employing 5000 people in India. It has a formulation development centre besides three manufacturing facilities in India.

Acquisition of the cod-liver oil brand Seacod

Sanofi is negotiating with Seacod maker for strategic tie-up. Universal Medicare is the manufacturer of Seacod, the famous cod-liver oil and other nutraceuticals. Acquisition of Seacod will help scale up Sanofi’s Over the Counter (OTC) business in India. It is rumoured that Sanofi has valued Universal Medicare at around Rs.450 crore and wants a majority acquisition in it. Universal Medicare is a privately held firm owned by Vikram Tannan and his family. The annual sales turnover of the company is around Rs.100 crore.

Focussing on OTC products

Universal Medicare manufacturers several OTC products like products for women’s health, products used to cure or treat arthritis and osteoporosis among others. The company has more than seven hundred medical representatives who cover more than 60000 doctors periodically for canvassing their products. India is the speediest growing drug retail market in the world level. OTC sector and consumer healthcare are growing at a healthy rate of 20% every year. This is attracting many multinational companies into the Indian pharmaceutical sector. It is rumoured that Abbott Laboratories of USA and GlaxoSmithKline of Britain are also interested in acquiring Universal Medicare.

Acquisitions and more acquisitions

Sanofi is operating in India through 5 different entities including Aventis Pharma. Sanofi has chalked its growth path through acquisitions. In India, it acquired Shantha Biotech for a whopping $784 million. It tried to acquire the Gujarat-based Paras Pharmaceuticals, but eventually lost the race to its British rival Reckitt Benckiser for Rs.3250 crore. However, Sanofi was successful in acquiring the Chinese drug company BMP Sunstone for $520 million. It has also acquired majority stake in a joint venture with the Chinese drug maker Hangzhou Minsheng Pharmaceutical. Three years back, Sanofi bought the American healthcare OTC firm Chattem Inc for an investment amount of $1.9 billion.

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If research is successful, cervical cancer can be prevented

Detecting, Treatment, and How to Prevent Cervical Cancer
Detecting, Treatment, and How to Prevent Cervical Cancer | Source

If research is successful, cervical cancer can be prevented

Paediatric vaccines to be given importance

For Shantha Biotech, paediatric vaccines are the priority, according to its Managing Director Harish Iyer. He was working as the research head in Biocon before joining his new assignment. The priority being given to paediatric vaccines makes sense as diseases attack children more than the adults and parents take care of their children’s heath much more than their own health. Shantha Biotech is also trying to bring back its pentavalent vaccine into the market. It was named as Shan5. The company is working with Sanofi Pasteur and UN agencies to speed up the process. Shantha Biotech is also planning to participate in the next tender process in UN this year.

If research is successful, cervical cancer can be prevented

Shantha Biotech is at the early stages of research with regard to a typhoid conjugate vaccine and a hexavalent vaccine. Shantha Biotech is also researching a human pappiloma virus (HPV) vaccine that could prevent cervical cancer. GSK and Merck are also doing research in this regard. Most of the sales turnover of the company is obtained through WHO and other UN agencies. Shantha Biotech is yet to have a foothold in independently marketing its vaccines and products. But associating with WHO and other UN agencies enable the company to sell its products to more than hundred countries in the world. UNICEF is funding various governments to buy these healthcare products and vaccines to distribute to the poor people in the respective countries. If Shantha Biotech starts independently marketing these products, it will not be as successful as it is now.

Geographical division

Sanofi will be focusing on well developed and rich markets like Japan, North America and Europe. Shantha Biotech will focus on emerging and under-developed markets like Africa, Asia and Latin America. During the current financial year, Shantha Biotech is aiming to achieve a double digit growth. Shantha Biotech is also exploring the possibility of working with the state governments in India to introduce its injectable polio vaccine.

Top level changes in Shantha Biotech

Sanofi decided to buy the US biotechnology major Genzyme Corp with an investment of over $20 billion. The offer price of Sanofi was $74 a share. After acquiring Shantha Biotech, Sanofi introduced top level changes in the Indian company. As already stated, Harish Iyer was inducted as Managing Director of the company. He will be reporting to Oliver Charmeil, President and CEO of Sanofi Pasteur. Sanofi supplies more than a billion doses of various vaccines every year. A year back, Sanofi was seeking a buyer for its US dermatology business. It was looking forward to raise $433 million through the sale.

Financial strength

In India, Sanofi has increased its gross sales from Rs.9367 crore in 2006 to Rs.11073 crore in 2010. Its net profit has increased from Rs.1693 crore in 2006 to Rs.2307 crore in 2010. It declared a dividend of 55% in 2010. Sanofi has been present in India since the year 1955 and is well aware of Indian markets to push growth for itself and for its acquired companies. In insulin and diabetes related products, Aventis Pharma is one of the leaders. One of its pain relieving medicine combiflam, a product with a combination of paracetamol and ibuprofen, has become very popular in India. The company has come with a range of products catering for blood pressure, heart disease, pain management and cancer therapy among others.

Five different entities to broadcast the same message

Sanofi is present in India through Sanofi Pasteur India, Shantha Biotech, Genzyme India, Sanofi Aventis and Sanofi Synthelabo. Only Sanofi Aventis is a publicly listed company wherein Sanofi holds a stake of 60.4%.

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