Servier announced on Friday 6 September that it was giving up for the time being the sale of its subsidiary Biogaran, the leader in generic drugs in France, thus ending an industrial but also political soap opera on health sovereignty. In an internal letter addressed to employees, a copy of which was obtained by Agence France-Presse, the Servier group announced that it had “We received expressions of interest from international investors for Biogaran”but having decided to end talks with interested parties.
“The proposed value creation did not seem beneficial to us” for the company, its employees, the Franco-European industrial fabric, as well as for patients, pharmacies and partners, writes Olivier Laureau, President of Servier, in this letter. “In addition, political and regulatory uncertainties weighed on these expressions of interest”duck.
This decision puts an end to months of speculation about the future of the French leader in generic drugs, which sells 320 million boxes a year in France. Since the rumours of a sale, which circulated at the end of 2023, Servier had not officially communicated its intentions regarding its subsidiary, launched in 1996 on the generics market and since then become the largest generic brand in France.
A political file
In the spring, the government warned against a possible sale of this laboratory, which holds almost a third of the generic market in France. This is therefore a sensitive issue in a context of drug shortages and efforts by the State to relocate essential drugs and attract additional investments in health.
Two Indian pharmaceutical companies, Aurobindo and Torrent Pharmaceuticals, had been identified as candidates, as well as the British fund BC Partners, which had submitted a bid together with Bpifrance in June. The French pharmaceutical company Benta Lyon had also positioned itself. There were fears that a foreign buyer could discontinue certain products or have them produced elsewhere.
On several occasions, the executive assured that “drastic conditions” It would be implemented in the case of a foreign buyer, with the possibility of activating the control of foreign investments in France so as not to compromise health sovereignty.
Following the resignation of the government, staff representatives raised the alarm in a petition to mobilise public opinion. They warned of the risks associated with “loss of sovereignty if production is relocated”which could be translated into “Less capacity to respond to health crises”, “No more stock shortages in pharmacies” AND “the elimination of jobs within Biogaran and its subcontractors”They also said they feared an acceleration of the sales process pending the appointment of a new government.
Some offers would have reached “more than a billion euros”
The generic drugmaker, which employs 240 people, currently produces half of its products in France, through 40 subcontractors who manufacture for it. 8,600 jobs depend on this. But with a turnover of 1.2 billion euros, it represents less than a quarter of the turnover of its parent company. No mention of prices was made in this information point contained in the internal email.
According to a source close to the matter consulted by Agence France-Presse, some offers reached “more than a billion euros” but “the question of price was not a predominant criterion” in Servier’s decision. However, the group is not throwing in the towel for good. “We may initiate new strategic reviews in the future, as we do periodically, to assess the potential of our activities”underlines.
For a mid-sized company like Servier, the drivers of growth lie elsewhere, primarily in innovation in oncology, a more lucrative expertise than generics.
