Sanofi has announced plans to establish a standalone firm in France to supply active pharmaceutical ingredients (API) to the European market.

The firm will be created by combining six of the company’s API production sites, including two in France, as well as one each in the UK, Italy, Germany and Hungary.

Sanofi will combine its commercial and development activities with these sites, employing approximately 3,100 people.

The company state that the firm will cater to the rising drug shortages by providing API manufacturing support, as well as supplies.

The entity will be the world’s second-largest API company, with nearly €1bn in expected sales by 2022.

Sanofi Global Industrial Affairs executive vice-president Philippe Luscan said: “Based on the expertise and experience built over decades within our industrial network, this new entity would help ensure greater stability in supplying drugs to millions of patients in Europe and beyond.

“With this endeavour, this new entity would be agile as a standalone company, and able to unlock its growth potential, especially in capturing new third-party sales and all the opportunities of a market growing at a pace of 6% per year.”

Independent operation of the firm could grow its sales to third parties and also expand its alliances with other pharmaceutical companies to open new growth opportunities.

The entity will work with a commercial network that runs in more than 80 countries.

Sanofi is considering an IPO of the firm on Euronext Paris and a decision is anticipated by 2022, subject to market conditions.