LONDON (ShareCast) - (Sharecast News) - Sanofi has announced plans to split its consumer-healthcare and pharmaceutical business, as it missed profit expectations for the third quarter, causing shares to drop over 15% on Friday.
The move, which chief executive Paul Hudson said would allow it to focus on medicines and vaccines and become a "pure play biopharma company", follows similar moves by competitors Johnson & Johnson, GSK, Novartis and Pfizer, which have all spun off their consumer businesses in recent years.

It is part of the French group's so-called 'Play to Win' strategy, and is hoped to "enabl[e] greater management focus and resource allocation to the needs of the Biopharma business, where value-creating opportunities and longer-term operational levers have been identified to support the accelerated R&D investments".

Sanofi said it was exploring options but the most likely scenario was the creation of a separate listed entity in France for the consumer operations. The split will happen at the earliest in the fourth quarter of 2024.

Hudson said the spin-off would allow the company to "deepen our investment in R&D, taking steps toward becoming a pure play biopharma company, and further optimis[e] our cost structure".

"This will help us accelerate innovation and strengthen our growth drivers, while ensuring long-term profitability and enhancing shareholder value," Hudson said.

The news came as Sanofi missed expectations with third-quarter sales falling 4% to €11.96bn, below the consensus forecast of €12.06bn. Business net profit was down 11% at €3.20bn, under estimates of €3.27bn.

However, the company reiterated its guidance to grow earnings per share by mid-single digits at constant exchange rates this year.

The stock was down 15.5% at $84.93 by 1141 CEST.

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