The French drugmaker announced the plan in 2014 results last night, explaining that capital expenditure (CapEx) will increase from €1.2bn to between €1.8bn and €1.9bn as a result of investments in biologic capacities and capabilities.
Interim CEO Serge Weinberg said: “We expect to have this increased CapEx which is loosely designed to build our biologics infrastructure to be there for two to three years” adding that “we have to build that capacity in order to sustain our launches.”
Sanofi’s late-stage biologics pipeline includes the Lantus replacement Toujeo (insulin glargine [rDNA origin]), which is due to be launched in the US this year, and the cholesterol drug Praluent (alirocumab) which has been accepted for priority review by the US FDA.
The firm also expects to file its rheumatoid arthritis monoclonal antibody (mAb) sarilumab in the US and to begin Phase III studies of its asthma biologic, dupilumab, towards the end of the year.
Genzyme
Sanofi’s biologics investment will also include Genzyme according to CFO Jerome Contamine, who said: “Genzyme has been one of the drivers of the improvement of the gross margin. Again last year, it was the largest driver.
“And the reason is basically that when you are able to fix your manufacturing issues in biologics, where the cost of good is mainly fixed cost and 80% of the cost of goods in biologics is fixed against 50% for small molecules you clearly have a leverage.”
Vaccines
In vaccines the investment will be focused in two areas according to Sanofi Vaccines chief Olivier Charmeil.
In the US the plan is to expand capacity for Pentacel, for which Charmeil said Sanofi is seeing strong demand after bringing it back to market following problems at a plant in Toronto, Canada that earned the firm a US FDA warning letter and temporarily limited supplies.
“We are not anymore constrained. We are busy in the context of strong demand. We are busy continuing to expand our offer of supply in 2015. By 2015 we will continue to show strong supply versus the 2014.”
Elsewhere the focus will be expanding capacity for children’s vaccines according to Charmeil, who said: “We continue also to show some progress in terms ability to supply in the context of very strong demand. So we continue to increase our capacity.”