Sanofi to let go off staff at vaccine plants in India as part of review

Sanofi India

30/01/2023 14:00

By Leroy  Leo
       Jan 30 (Reuters) - French drugmaker Sanofi SA  SASY.PA 
is reviewing operations at two of its vaccine making facilities
in India and plans to let go of all employees at the plants, the
company told Reuters, after it failed to win a UNICEF contract.
    The drugmaker is offering voluntary retirement scheme (VRS)
to all its employees at two sites near Hyderabad, a spokesperson
for Sanofi's India unit told Reuters in an email.
    About 800 employees could be affected by the decision, two
sources familiar with the matter said. The sources did not want
to be named as the matter is confidential.
        Sanofi India declined to comment on the number of
employees who would be offered VRS. The French company has over
5,000 employees in India, according to its website.
    The two plants manufacture vaccines against hepatitis B,
diphtheria and tetanus, and also have packaging facilities for
insulin, but demand for their products has been hit by the
pandemic as other drugmakers in India and globally have raised
capacity.
    While the spokesperson said "there is no plan to sell any
asset at this stage", the sources said a sale could be a
possibility later.
    Sanofi plans to transfer the packaging of insulin and
related injectible devices to another site and is currently
evaluating which site will support it, the spokesperson said.
    Sanofi owns the facilities through Sanofi Healthcare India
Pvt Ltd, which was renamed from the erstwhile Shantha
Biotechnics.
    The French company acquired full stake in Shantha
Biotechnics in various tranches between 2009 and 2013, with its
initial acquisition of an 80% stake at a valuation of 37.7
billion rupees, which at that time was around $800 million.
    The facilities, however, have struggled as Sanofi failed to
win a UNICEF contract to supply Shan-5, a vaccine against
diphtheria, tetanus, whooping cough, hepatitis B and influenza
type B.
    The vaccine came under regulatory scrutiny for quality
issues over a decade ago, after the UN agency and the World
Health Organization raised concerns.
    "In particular, new pharmaceutical manufacturers have
established themselves and increased the overall supply capacity
for both vaccines and medicines," the spokesperson said.
    "As a result, globally, Sanofi has had to adapt its strategy
and portfolio to these trends."
    The company said it will continue to fulfill all its current
supply commitments to the Indian government.
 (Reporting by Leroy Leo in Bengaluru; Editing by Saumyadeb
Chakrabarty)
 ((Leroy.Dsouza@thomsonreuters.com ; Twitter: https://twitter.com/LeroyLeo7;))