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27 February 2020Big PharmaRory O'Neill

Sanofi to create ‘world’s second biggest’ API manufacturer

French drugmaker Sanofi is looking to create a new European manufacturer of active pharmaceutical ingredients (APIs), amid concerns over dependence on a Chinese manufacturing sector hit by coronavirus.

Sanofi will combine six European manufacturing plants into a new standalone company, with sites in France, the UK, Italy, Hungary, and Germany.

According to Sanofi, the new firm would rank as the world’s second largest API manufacturer, with claimed expected sales of €1 billion by 2022.

A statement from the French drug company said a new European hub for producing drug ingredients could help balance the pharmaceutical industry’s “heavy reliance on API sourced from the Asian region”.

China is a major supplier of APIs to drugmakers around the world, with some estimates placing a figure of 40% on its share of global production.

The Chemical Pharmaceutical Association’s 2019 industry report on API market trends estimates that 60% of global production in volume is located in India and China.

Given the importance of Asia to API production, there is growing concern over the potential impact the coronavirus outbreak could have on the global drug supply.

Stephen Hahn, commissioner of the US Food and Drug Administration (FDA) told reporters today that the agency was “keenly aware that the outbreak will likely affect the medical product supply chain, including potential disruptions to suppliers [and] shortages of critical medical products in the US,” CNN reported.

Mike Kaufmann, CEO of Cardinal Health, tried to reassure investors earlier this month that the industry was capable of withstanding the impact of coronavirus to the supply chain, remarking that it was “something the industry should be able to work through”.

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