By Ludwig Burger
(Reuters) – Shares in EuroAPI, the drug ingredients business spun off from Sanofi, rose on their Paris stock market debut on Friday, defying a wider market decline.
EuroAPI traded at around 12.25 euros at 0915 GMT, valuing the contract manufacturer’s equity at 1.15 billion euros ($1.21 billion) and up 2% from its reference price of 12 euros.
The stock premiered in choppy markets, with world stocks falling towards their lowest in over a year as investors anticipated more U.S. interest rate rises and worried about the hit to growth from China’s zero-COVID policy.
The STOXX Europe 600 Health Care index was down 1.7%, while France’s blue chip index was off 1.5%.
“What a remarkable day it is,” said EuroAPI Chief Executive Karl Rotthier after ringing the opening bell in Paris.
“It’s my birthday today, that’s another good start,” added Rotthier, who joined in early 2020 from Dutch pharma ingredients maker Centrient Holding.
Sanofi shareholders will receive one EuroAPI share for 23 shares held in the parent company.
Sanofi shares were down 0.2%, when adjusting for EuroAPI’s separation and the payout of a 4.07 billion ordinary dividend.
Sanofi, which will keep a 30% stake, distributed 58% of EuroAPI’s equity capital to Sanofi shareholders as a dividend in kind. The French state will acquire 12% in the new company, based on the average market price over the next 30 days.
The group joins rivals including Siegfried and Lonza as stand-alone ingredients and services suppliers to the drugs industry.
As an independent group, EuroAPI has said it will push to win over more of Sanofi’s rivals as customers and expand in high-margin drug development services.
Pharma groups that, unlike Sanofi, continue to produce drug ingredients for other drugmakers include Pfizer, Teva and family-owned Boehringer Ingelheim.
EuroAPI’s flotation comes as the coronavirus pandemic and Russia’s attack on Ukraine have heightened concerns in the European Union over the region’s dependency on critical pharma ingredient imports.
($1 = 0.9471 euros)
(Reporting by Ludwig Burger Editing by Jason Neely and Mark Potter)
