By Denise Roland

Sanofi SA plans to offload most of its long-held stake in Regeneron Pharmaceuticals Inc., giving the company an $11.1 billion war chest to help reshape its drug pipeline as it doubles down on rare-disease and cancer medicines.

The French health-care giant, which holds a 20.6% stake in Tarrytown, N.Y.-based Regeneron, said it would sell 11.8 million of those shares through a public offering priced at $515 a share. It will also sell a further 9.8 million shares back to Regeneron. If demand is strong, Sanofi could sell an additional batch of shares, leaving it with a small stake of 400,000 shares and overall proceeds of $11.7 billion.

The sale won't affect Sanofi's partnership deals with Regeneron, which span a number of successful drugs including bestselling eczema treatment Dupixent.

Sanofi Chief Executive Paul Hudson said the sale would "help further our ability to execute on our strategy to drive innovation and growth."

Mr. Hudson, who took the helm of Sanofi in September, plans to focus the company's research pipeline on the more-lucrative areas of rare diseases and cancer, pivoting away from historically strong areas like cardiovascular disease and diabetes.

Peter Verdult, an analyst at Citi, said in a note to clients that he expected the proceeds to be used to fund several small deals, of less than $5 billion apiece, to snap up candidate drugs still at an early stage of development at smaller companies.

The companies' longstanding collaboration -- they started working together in 2003 and Sanofi first purchased a stake in Regeneron the following year -- has yielded five approved drugs so far, with more under development.

Those include Dupixent, a drug that Mr. Hudson has said could eventually pull in as much as EUR10 billion ($11 billion) in annual revenue. The pair are testing another of their jointly developed drugs -- Kevzara for rheumatoid arthritis -- as a potential treatment for Covid-19, in the hope that it could damp a potentially fatal immune overreaction seen in some patients with a severe form of the new disease. That trial was narrowed last month to focus on only the most critically ill patients after early data showed no benefit in patients on less-invasive types of oxygen support.

The partnership has also yielded disappointments. Praluent, a cholesterol-lowering drug, has flopped amid resistance from payers to the price tag for the new medicine versus generic statin drugs.

"Sanofi and Regeneron's collaboration has been one of the most productive in the industry," said Mr. Hudson. "Sanofi remains committed to continuing our collaboration with Regeneron which remains an integral part of our overall strategy."

Write to Denise Roland at Denise.Roland@wsj.com