Sanofi's ($SNY) Shantha buyout fails to live up to expectations
Sanofi-Aventis' ($SNY) acquisition of Indian vaccine maker Shantha Biotechnics has failed to live up to analyst forecasts, according to Bloomberg. Sanofi announced in July 2009 that it was paying €550 million for the Indian company, which develops, manufactures and markets a recombinant human healthcare product in India. And sales of the company's products were expected to total $90 million this year.
Over the summer, however, the World Health Organization cancelled the pre-qualification to Shan5, which prevents diphtheria, pertussis, tetanus, haemophilus influenza B and hepatitis B, because of manufacturing defects found in samples produced at a plant in India. The suspension has cost Sanofi the $340 million in sales it planned to book from 2010 to 2012 from a contract with Unicef, Bloomberg quotes Pascal Barollier, a spokesman for the company's Sanofi Pasteur vaccine unit, as saying.
The shot will be off the market until 2013 while Sanofi sorts out the manufacturing problem and resubmits the vaccine to the WHO for approval. The company is "doing everything possible" to implement corrective measures, Barollier added.
Also, local press reports state that Sanofi has been asked to cough up a capital gain tax amount of Rs 700 crore by the Income Tax department. Sanofi has challenged the claim, and the matter is now in the AP High Court, the Times of India reports. The case is similar to one involving Vodafone, according to the paper.
- get more from Bloomberg
- see the Times of India article
- check out the story from the Financial Express