Sanofi Acquires Stake In Zentiva

Sanofi-Aventis has spent about $516 million to acquire a 24.9% interest in the fast-growing Czech pharmaceutical company Zentiva. Paris-based Sanofi bought most of the stake from Warburg Pincus, which invested in one of Zentiva's predecessor firms in 1998, and the rest from current and former Zentiva employees.

Sanofi, which is now Zentiva's largest shareholder, calls the purchase "a strategic move in the development of Sanofi-Aventis in Central and Eastern Europe." It says it will set up a joint committee with Zentiva to explore "future development and investment opportunities."

Zentiva was formed in August 2003 by the merger of Léčiva and Slovakofarma, two of the largest drug companies in, respectively, the Czech Republic and Slovakia. An initial public offering of stock followed less than a year later.

Zentiva is focused on branded generic drugs and had sales last year of close to $500 million, up 10.9% from 2004. The company employs more than 4,000 people and operates production sites in the Czech Republic, Slovakia, and Romania. It claims to have strong positions in those three countries and to be growing rapidly in Poland, Russia, and the Baltic states.

CEO Jir?? Michal says the transaction "will enable us to accelerate and support the growth of Zentiva in our core countries based on the strategy that we set out at the time of our IPO in June 2004."

Sanofi's purchase is the second recent push by a Western drug company into Central Europe's generic drug industry. Iceland's Actavis just made an unsolicited $1.6 billion bid for the Croatian generics maker Pliva (C&EN, March 27, page 9).