In October 2023, Sanofi announced plans to separate its consumer health unit in 2024. Sanofi’s consumer health division, with flagship products like Doliprane and Allegra, has been a reliable contributor to the company’s revenue. However, as CEO Paul Hudson implements his “play to win” strategy, these products, while strong, do not align with Sanofi’s evolving vision to lead in high-impact, high-growth areas like oncology, immunology, and vaccines. The key to Sanofi becoming a pure biopharma player: investment.
A year later, the French company announced the divestment of a 50% controlling stake in its consumer health division, Opella, to U.S. private equity firm Clayton Dubilier & Rice (CD&R) in a deal valued at approximately $17.4 billion (€16 billion). This move aligns Sanofi with a broader industry trend where pharmaceutical companies focus on high-margin, innovative therapeutics, a shift from lower-margin consumer health products.
Indeed, in 2022, GSK spun off its consumer health business to form Haleon, allowing it to concentrate on prescription medicines and vaccines. This allowed Pfizer to exit from its joint venture with GSK selling its share of the consumer health unit. Similarly, Johnson and Johnson completed the separation from its consumer health unit, Kenvue, in 2023.
While this move from Sanofi is not completely unprecedented, it did not go unnoticed and received considerable coverage, especially in France where it sparked some concerns. After CD&R’s offer beat the one from French player, PAI, amidst fear of a backlash regarding jobs safety in France or medication availability, Sanofi’s chief executive officer (CEO), Paul Hudson said nothing would change as the company’s headquarters would remain in France, reported the Financial Times.
Besides this national debate on whether Opella’s controlling stakes going to CD&R is a good thing or not, recent investments are showing that Sanofi is putting its money where its mouth is regarding its ambition to focus on innovative medicines and vaccines. Indeed, the company is actively investing in advanced technologies such as radioligand therapy and gene regulation, demonstrating a commitment to high-stakes areas.
In times when research and development (R&D) spending is under pressure due to the Inflation Reduction Act among other factors, Sanofi making the decision to take even more space in innovative medicines could be good news, not only for the company but for the broader biotech industry.
Sanofi’s “play to win” strategy ramping up investments
Sanofi’s “play to win” strategy marks a clear pivot to biopharma. A year ago, Hudson emphasized that Sanofi is committed to “bringing new and transformative products to market and building an industry-leading immunology pipeline,” ultimately becoming a “pure-play biopharma company.”
A year later, it seems Sanofi’s deal with CD&R is already paying off as Sanofi inked important deals in the last couple of months in areas typically targeted by this “play to win” strategy.
Sanofi investing in radioligand therapy with Orano Med
In October 2024, Sanofi announced a strategic partnership with Orano Med, a subsidiary of the Orano Group specializing in targeted alpha therapies for oncology. This collaboration aims to develop next-generation radioligand therapies (RLTs) for rare cancers, leveraging Orano Med’s expertise in lead-212 (Pb-212) based technologies.
Radioligand therapy is a treatment that combines a radioactive isotope with a molecule targeting specific cancer cells. This approach delivers radiation directly to malignant cells, minimizing damage to surrounding healthy tissue. Pb-212, an alpha-emitting isotope, is particularly effective due to its high-energy emissions and short path length, which enhance tumor cell destruction while preserving surrounding normal cells.
A central component of this partnership is the development of AlphaMedix (212Pb-DOTAMTATE), an advanced-stage experimental therapy. AlphaMedix is currently in phase 2/3 for treating patients with progressive, unresectable, or metastatic neuroendocrine tumors (NETs) expressing somatostatin receptors – a category of cancers with limited treatment options.
By investing in advanced RLTs, Sanofi aims to enhance its oncology portfolio with a specific focus on rare cancers. The collaboration also positions Sanofi at the forefront of radiopharmaceutical innovation, a field gaining momentum in cancer treatment but where there is still much to be done.
Sanofi takes stakes in Agomab Therapeutics and its fibrosis pipeline
October has been a busy month for Sanofi. The CD&R deal and the partnership with Orano Med weren’t enough apparently, as the French company participated in an $89 million series D financing round for Agomab Therapeutics, a Belgian biotech company specializing in fibrosis-focused therapies.
Agomab is developing therapies that modulate fibrosis and promote regeneration in chronic conditions such as fibrostenosing Crohn’s disease and idiopathic pulmonary fibrosis (IPF). On the one hand, this subtype of Crohn’s disease currently has limited treatment options that focus on managing inflammation and symptom relief, such as steroids and immunosuppressants, but do not address the fibrotic component directly – on the other hand, currently approved treatments for IPF may slow disease progression but have limited efficacy and come with potential side effects. In both conditions, patients eventually need surgical interventions.
Sanofi with its strategic investment in Agomab is positioning itself in the run for a first-in-class drug for several conditions. The Belgian company’s lead candidate, AGMB-129, is a gut-restricted oral small molecule inhibitor targeting ALK5 (TGFβ1R), currently in phase 2a clinical trial for fibrostenosing Crohn’s disease. Interim data from this trial are anticipated in the first quarter of 2025.
This deal enhances Sanofi’s pipeline with potential first-in-class therapies in fibrotic diseases and complements Sanofi’s existing focus areas, particularly in immunology and inflammation.
Sanofi making a move in obesity RNA therapeutics with Resalis Therapeutics
Did you think Sanofi’s October investment spree was over? Almost the same day as its Agomab deal, Sanofi made an equity investment in Resalis Therapeutics an Italian biotech company specializing in RNA-based therapies for metabolic disorders.
This investment aims to accelerate the development of Resalis’ lead investigational candidate, RES-010, through a phase 2 proof-of-concept clinical trial. RES-010 is a first-in-class antisense oligonucleotide targeting microRNA-22 (miR-22), a non-coding RNA implicated in obesity and related metabolic diseases. By inhibiting miR-22, RES-010 seeks to reprogram metabolic pathways, potentially leading to sustained weight loss and improved metabolic health.
Obesity has been a big topic recently, with Novo Nordisk and Eli Lilly leading the way with their GLP-1 agonists Wegovy and Zepbound. But the strategy Sanofi just took stakes in is different, and could perhaps address the challenges GLP-1 drugs have faced – supply for instance.
Sanofi was “playing to win” long before Opella’s divestment
Sanofi didn’t wait to find the right partner to divest Opella to start making moves towards becoming a pure biopharma company as part of its CEO “play to win” strategy.
In August 2024, just before it announced the CD&R deal, Sanofi took part in a $100 million direct offering by AnaptysBio, a clinical-stage biotechnology company specializing in immunology therapeutics.
AnaptysBio is developing immune cell modulators for autoimmune and inflammatory diseases with several checkpoint agonists in the pipeline. ANB032 (BTLA agonist) is currently in phase 2b for the treatment of atopic dermatitis and Rosnilimab (PD-1 agonist) is also in phase 2b for both rheumatoid arthritis and ulcerative colitis.
Additionally, AnaptysBio is advancing other immune cell modulator candidates, such as ANB033 (anti-CD122 antagonist antibody) entering a phase 1 trial, and ANB101 (BDCA2 modulator antibody) in preclinical development.
Moreover, just after it announced it wanted to separate its consumer health division in October 2023, Sanofi made a $30 million investment in MeiraGTx, a clinical-stage gene therapy company specializing in gene regulation technologies.
As part of the agreement, Sanofi secured the use of MeiraGTx’s riboswitch gene regulation technology in areas such as immunology and inflammation, central nervous system (CNS) targets, GLP-1 and other gut peptides for metabolic diseases, as well as MeiraGTx’s phase 2 xerostomia program.
Riboswitches are segments of RNA that can regulate gene expression in response to specific small molecules. MeiraGTx’s riboswitch technology enables precise, dose-responsive control of gene expression, allowing for the regulation of therapeutic genes.
The collaboration focuses on applying riboswitch technology to immunology and CNS disorders. In immunology, this could lead to therapies that modulate immune responses with high precision, potentially offering new treatments for autoimmune diseases and inflammatory conditions. In CNS disorders, controlled gene expression may address challenges in treating neurological diseases by delivering therapeutic proteins directly to affected areas in the brain.
It’s only been a year since Sanofi announced the “new era of its play to win strategy,” marking a shift away from consumer health to focus on first-or-best-in-class candidates and it has already laid eyes on several areas with unmet needs. Now that it has secured the transition by divesting 50% of Opella to CD&R bagging $17.4 billion (€16 billion) in the process, it certainly has the firepower to build even more synergies with its pipeline.
Sanofi: Set to become an R&D powerhouse through its investment strategy
Sanofi’s divestment of Opella is expected to funnel significant resources into its biopharma R&D, which aligns with Hudson’s vision. By reallocating capital from consumer health, Sanofi is directing more funding into late-stage drug development, with plans to expand its phase 3 pipeline by 50% and target potential blockbuster assets by 2030.
Sanofi has outlined ambitions to secure over $23.97 billion (€22 billion) in sales by 2030 across core segments like immunology, oncology, and vaccines and examples of reinvestment are already showing the company’s intent to build a diverse, innovation-driven portfolio with a focus on conditions with limited options.
In addition to Opella’s divestment, Sanofi has initiated cost-saving measures aimed at saving up to $2.18 billion (€2 billion) by 2025. According to Sanofi’s CFO, François Roger, these savings are being redirected toward R&D and accelerating key assets in the pipeline, helping Sanofi strengthen its focus on high-margin therapeutics.
This new strategy of Sanofi does not come out of the blue and it’s very likely a response to the patent cliff that many big pharma companies are facing. Indeed, when patents on high-revenu drugs expire, it allows competitors to enter the market with generics, resultint in a decline of the revenues associated with that drug. For Sanofi, notable drugs like the multiple sclerosis treatment Aubagio have recently lost patent protection.
To mitigate the financial impact of these patent expirations, Sanofi is divesting from its consumer health division and reallocating resources towards research and development of new, high-margin therapeutics. This approach aims to replenish its product pipeline with innovative drugs that can drive future growth and offset losses from the patent cliff.
With fresh capital, Sanofi is poised to further expand its immunology focus and build momentum. It wouldn’t be surprising to see Sanofi on the list of investors in the next funding rounds. Sanofi was contacted for comments, but no response was received by the time of publication.
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