Sanofi Bets on China and Invests 1 Billion in an Insulin Factory

Sanofi is turning its attention to the Chinese market. The pharmaceutical company has announced that it will invest 1 billion euros to build an insulin factory in Beijing. The news comes a few weeks after it was announced that the French group will increase its production in its local market by 40 million euros.

This will be Sanofi’s fourth production facility in China and the largest capital injection by the French group in the Asian country. The company entered the Chinese market four decades ago and has plants in Beijing, Shenzhen and Hangzhou.

Sanofi justifies the new investment in the large market of insulin-demanding patients in China, which in 2021 had 140 million diabetic adults . The new factory will have automated production, digitally integrated management and sustainable standards.

Sanofi has three other production plants in the Chinese market

Sanofi’s investment in China is in line with that of other pharmaceutical companies such as Pfizer, which last November announced a $1 billion investment in the country by 2030 to help accelerate the introduction of new drugs, improve diagnostics and support local biotechnologies through collaborations.

However, other giants in the sector have begun to divest from the Chinese market. AstraZeneca was caught up in an investigation in the country, causing its shares to plummet on the stock exchange. Johnson & Johnson and Merck also cut jobs at their Chinese headquarters.

The company also invested 40 million in its factory in Lyon, France

Sanofi will invest €40 million in its Lyon Gerland factory to enhance production of Thymoglobulin, an antibody for kidney transplant rejection, and Tzield, a type 1 diabetes drug. The investment includes €25 million for a second-generation Thymoglobulin and €15 million to localize Tzield production. With launches planned for 2025 and 2027, Sanofi aims to expand capacity and reliability. Boosted by strong vaccine sales, the company is divesting a €16 billion consumer unit stake to fund next-gen drug trials.

Sanofi closed the third quarter of the year with operating income, excluding extraordinary items, of 4.6 billion euros, 14.6% more than in the same period of the previous year.

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(Featured image by Christian Lue via Unsplash)

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