News March

Sanofi invests in generics market

BUDAPEST Sanofi-Aventis bought a 24.9 percent stake in the Czech drug maker Zentiva for €430 million, the French company said Monday, as it expands in Russia and Eastern Europe and positions itself for growth in the market for generic drugsSanofi-Aventis bought a 24.9 percent stake in the Czech drug maker Zentiva for €430 million, the French company said Monday, as it expands in Russia and Eastern Europe and positions itself for growth in the market for generic drugs.

Sanofi will be the Prague company's biggest investor after paying $516 million for the 20 percent stake held by the venture capital firm Warburg Pincus and 4.9 percent in shares of the company that were held by Zentiva employees, Paris- based Sanofi said.

Zentiva focuses on treatments for heart disease, central nervous system illnesses and inflammation, according to its Web site.

Jean-François Dehecq, Sanofi's chief executive, is positioning Sanofi to benefit from demand for generic drugs, which may grow into a $100 billion market by 2010 as governments try to keep down expenses. Western pharmaceutical makers are buying East European companies to take advantage of lower costs and growth markets in the region.

Sanofi is expected to benefit from the partnership because it will give it greater access to Eastern Europe's emerging markets, Gbola Amusa, an analyst for Sanford C. Bernstein in London, said.

"We expect that companies with solid positions in these markets would experience disproportionately high growth" as Eastern European nations become wealthier, Amusa said.

Source
http://www.iht.com/articles/2006/03/27/bloomberg/bxdrug.php