Deals and agreements are a common practice in the healthcare sector. We have seen several deals, collaborations and acquisitions last year. A number of similar deals have also been made so far this year.
Last week, Sanofi (SNY) announced that it has entered into a strategic agreement with Boehringer Ingelheim. The companies will manufacture therapeutic monoclonal antibodies to reinforce Sanofi’s manufacturing capacity to support upcoming product launches.
Most of the company’s research and development are centered on biologics and almost half of them are monoclonal antibodies (mAbs). The deal will allow Sanofi to access Boehringer Ingelheim’s capabilities in Biberach an der Riss, Germany, for the transfer and manufacturing of therapeutic mAbs.
Initial product transfers are expected to start soon. The financial details of the deal were kept under wraps.
We have seen Sanofi often entering into similar deals and collaborations. Last month the company said that it will be acquiring Merck & Co. Inc.’s (MRK) manufacturing facility in Barceloneta, Puerto Rico. The successful acquisition of the facility will help Sanofi to expand the global operations of its Animal Health business (read more: Sanofi Buys Merck's Manufacturing Facility in Puerto Rico).
Meanwhile, 2015 is expected to be a tough year for Sanofi as far as its Pharmaceuticals segment is concerned. The company had earlier said that its diabetes business will remain flat this year. The company’s diabetes business is one of the largest contributors to the Pharmaceuticals segment as well as to the company’s top line. We expect investor focus to remain on this segment going forward.
Sanofi carries a Zacks Rank #4 (Sell). Some better-ranked companies in the healthcare space are Amgen Inc. (AMGN) and AbbVie Inc. (ABBV). While Amgen holds a Zacks Rank #1 (Strong Buy), AbbVie carries a Zacks Rank #2 (Buy).
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