Tuesday, April 2, 2013

Sanofi may opt for M&A to drive growth in China

Sanofi is eying double-digit sales growth in China in the next five years. Company is looking to to expand its animal health and vaccine business in China this year, which will boost sales beyond its €1 billion-plus ($1.28 billion-plus) sales in the country last year.In 2012, Sanofi's sales in China jumped 15% last year.

Sanofi plans this year to open four manufacturing plants in China, up from its current six, and expand its production of pharmaceuticals, vaccines and consumer health-care and animal-care products, Mr. Viehbacher said. The company is looking to move further into China's smaller cities as the Chinese government builds more hospitals and local clinics there. Emerging markets including China are are critical to Sanofi's sales and comprise 31.9% of the company's  annual global sales of Euro 35billion

Sanofi is looking for acquisitions in China for its health-care division and is eying animal-health purchases as well.  Its Merial animal-health division currently sells vaccines for poultry, swine and pets in China and accounts for an estimated 4% of Sanofi's China sales, according to Morgan Stanley MS -1.48% . S

Sanofi is also facing pressure on pricing as the Chinese government moves to make drugs more affordable. Earlier this year, leaders set new price restrictions on 700 formulations of 400 drugs, one of which was Sanofi's diabetes drug Lantus. Its price was slashed by 12.9%.


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