• Drugmaker trying to decide what assets to include in portfolio
  • Sale process may not start until as late as next year

Sanofi’s plans to begin the sale process for its European generics business is likely to be delayed as France’s largest drugmaker needs more time to determine which assets should be included, according to people familiar with the matter.

The potential divestment, which was planned to begin this quarter, may come later this year or early 2017, the people said, asking not to be identified because the deliberations are private. Sanofi is considering a variety of options including selling all of its global generics business, or an asset swap or a joint venture, the people said. The company may also decide to retain the assets, they said.

A spokesman for Sanofi declined to comment on the deliberations.

Chief Executive Officer Olivier Brandicourt said in November he would consider strategic options for Sanofi’s Merial animal-health business and European generics operations, with the goal of making a decision within 12 months. Less then six weeks later, Sanofi said it was in exclusive talks with Boehringer Ingelheim GmbH to swap Merial for some consumer-health assets in a 22.8 billion-euro ($25 billion) deal.

A transaction involving the generics business is likely to be more complex, the people said.

“Geographic synergies are limited and market complexity is increasing” for the European generics operations, Sanofi said in November. Those assets were on track to generate about 1 billion euros in sales for 2015, according to a company presentation at that time. Globally, generics generated about 1.92 billion euros in sales for Sanofi in 2015, with more than half coming from emerging markets.

Zentiva, Sanofi’s generics unit, makes copies of products that have lost patent protection, including the blood-thinner Plavix -- once a top-seller for Sanofi -- and the Aprovel hypertension drug. It operates in 50 markets, with a large presence in the Czech Republic, Romania and Turkey, according to Zentiva’s website. Its main manufacturing facilities are in central and eastern Europe.

On Feb. 9, Brandicourt told analysts that the company was assessing different options for its European generics business, though he declined to elaborate. The CEO reiterated his goal of reaching a decision within 12 months.