Coronavirus interruption of drug supply chain pushes Sanofi to open a firm in France

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Happy Monday, readers.

I spoke with Sanofi CEO Paul Hudson today about the company’s latest ambition—creating a massive new drug manufacturing company based in Europe. That may sound like a natural business decision for a French pharmaceutical giant, but it has a very specific implication as the coronavirus outbreak rages on in Asia and beyond.

China is one of the world’s largest manufacturers of active pharmaceutical ingredients (APIs)—the main chemicals at the heart of medicines used by millions across the world. The way the coronavirus outbreak has affected the country’s medical supply chains underscores why Sanofi wants to create an API manufacturing firm in France, according to Hudson.

“This recent challenge of coronavirus has brought it acutely into focus that Europe can’t wait longer to create this European powerhouse for manufacturing drugs,” he told Fortune.

This (as-of-yet-unnamed) new organization will aim to create active drug ingredients for hundreds of third party partners across a myriad of disease spaces, with a goal of going public by 2022.

“Some essential medicines are hard to get in the pharmacy in Europe,” said Hudson. “Why? Because over time, we pressured the price to be so low, it could only be made in China or India. And then if you come to a situation where China or India can’t make that supply, it’s patients in Europe who can’t get access.”

Hudson, a decades-long biopharma veteran, has only been in the top perch at Sanofi since September 2019. But he’s already made his mark with executive shakeups and a transformation of the company’s underlying business strategy. For more on our conversation and Sanofi’s goals with this new company, head over here.

Read on for the day’s news.

Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy





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