Sanofi S.A.’s (NASDAQ: SNY) announcement that it would be investing in a COVID-19 vaccine production site in France gave shares a boost early Tuesday. Although this deal is not cheap, and it’s not a sure thing that the company will cross the vaccine finish line first, Sanofi has the financial backing to push this through.
In terms of the specifics, Sanofi will be investing over half a billion euros to develop its Evolutive Vaccine Facility (EVF) in Neuville-sur-Saône. The project represents an investment of €490 million over a five-year period and is expected to create 200 new jobs.
The EVF is a new type of factory designed around a central unit housing several fully digital production modules where it is possible to produce three to four vaccines simultaneously, compared with only one in current industrial sites. This modularity will make it possible to prioritize the production of a specific vaccine in a timely manner based on public health issues.
At the same time, Sanofi also has committed to investing €120 million to create a new research and development center in France at the Sanofi Pasteur site in Marcy-l’Etoile to develop future vaccines.
Paul Hudson, CEO at Sanofi, commented:
Sanofi’s heart beats in France. We have a long history and exceptional teams working throughout the country, embodying our strong values. By investing in a new industrial site and a R&D center, Sanofi positions France at the core of its strategy, aiming to make France a world-class center of excellence in vaccine research and production. Sanofi is a major healthcare player in France, in Europe, and worldwide. It is our responsibility to focus our resources and expertise against the current pandemic, but also to invest in preparing for future ones. We welcome the ongoing collaboration and commitment of the French authorities who we have been working alongside with the last several months to achieve this.
Sanofi stock traded up nearly 2% Tuesday morning to $51.48, in a 52-week range of $37.62 to $51.84. The consensus price target is $56.63.
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