(AOF) – Two weeks after revealing degraded annual results and prospects, Euroapi announced the suspension of its 2024 objectives. The action of the specialist in active pharmaceutical ingredients fell by 22.03% to 2.55 euros, bringing its losses at 55% since January 1. It is trading at its historic lows after being listed on the stock market in 2022 at a price of 12 euros.
Euroapi announced the suspension by its Italian subsidiary Euroapi Italy SRL of production of all APIs at its Brindisi site. Following an internal audit, quality control failures, attributable to potential shortcomings at local level, were identified and are being investigated in depth. Production will remain suspended until further notice.
This situation should impact the group’s operational and financial performance. Consequently, the 2024 outlook is suspended.
A revision of the 2024 outlook will be made public during the second quarter of 2024, during the planned communication on the implementation and financing of the Focus-27 project, announced on February 28, 2024.
In 2023, sales from the Brindisi site amounted to 63 million euros, of which 43% were made with Sanofi. The value of Brindisi’s non-current assets has been fully written down in the 2023 consolidated accounts.
The relevant health authorities have been informed. The company has initiated a forensic audit and will inform its customers
AOF – LEARN MORE
Key points
– One of the world leaders in active pharmaceutical ingredients (No. 1 in small molecules, 2nd in APIs combining small and large molecules and 7th in innovative molecules), created in December 2021 by separation from Sanofi;
– Revenues of €977 million, distributed between API Solutions for 73% and CDMO.
– Business model based on a clear commercial strategy of expansion into new markets and aiming to become a reference partner for pharmaceuticals and biotechs;
– Capital held 30.1% by Sanofi, 12% by bpiFrance and 5.5% by L’Oréal, Viviane Monges chairing the board of directors of 12 members, Karl Rotthier being general manager;
– Very healthy balance sheet with €1 billion in equity and €19.8 million in net debt.
Challenges
– Strategy 2026:
– growth in turnover of +7% to +8% including double-digit increase in revenue from activities other than Sanofi,
– operating margin of +20% in 2026 and greater than 18% in 2025
-€510 million in investments over 2022-25
– Innovation strategy:
– 4 major axes:
– industrial and logistical optimization, innovative molecules developed in the CDMO (Contract Development and Manufacturing) with 30 projects in progress, the combined offer of oligonucleotides and peptides from 2025,
– in response to sovereignty issues, mobilization of €125 million in investments: in France, focus on morphine R&D with the aim of increasing production from 2027 and, in Hungary, creation of a kilo -lab of highly active molecules in the Budapest laboratory and doubling of the industrial capacity of the prostaglandin site by 2027
– massive recruitment, particularly in CDMO and signing in 2022 of 20 R&D partnerships relating to manufacturing processes
– Environmental strategy aiming for carbon neutrality in 2050:
– 2 stages: 100% of sites powered by renewable energies in 2025, 30% reduction in CO2 emissions in 2035 (vs 2020),
– footprint reduction technologies and investments in biomass;
-Ramp-up in the production of vitamin B12, prostaglandin, peptides, hormones and oligonucleotides with an investment ratio increased to +14% of turnover;
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Competitive advantage in the manufacturing of conjugated and complex peptides and oligonucleotides
– Extensive portfolio of 200 references, 55% of which are differential and complex, produced on 6 industrial sites in Europe, an asset in the face of Asian competition penalized by costs and disruptions in the supply chain.
Challenges
– Change in capital, with Sanofi and Bpifrance having to retain their shares until May 2024 and L’Oréal until 2023;
– Increase in operating margin, less than half that of its European competitors – Lonza, Siegried, Bache and PolyPeptide – via an industrial transformation aimed at additional value creation of €50 million;
– Response from the European Commission to the group’s project to respond, by 2030, to the needs for macrolide antibiotics and corticosteroids;
– Continued reduction of dependence on Sanofi by obtaining new contracts;
– After a loss in 2022, due to depreciation on Brindisi assets, downward revision of the 2023 objective: turnover of €980 million and operating margin between 12 and 13%;
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No dividend for financial years 2022, 23 and 24
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