France's industry minister Marc Ferracci said that France could block a deal between Sanofi and the US private equity firm CD&R, to secure supply of medicines and uphold France's industrial footprint.

It's hard to see how its sale would compromise France's national interest. On the contrary: it would be in the interest of Sanofi - the majority of whose capital has long since passed into the hands of foreign investors - to be able to continue discovering or acquiring pioneering new therapies, and thus remain at the forefront of pharmaceutical innovation.

The latter represents a - colossal - cost that has to be financed. Lovers of all-out nationalization, who are already presiding over an abysmal budget deficit and a crushing state debt, would be more than happy to explain how they intend to do this!

Moreover, Opella operates in a fiercely competitive market, subject to strong inflationary pressures, and where pricing power remains limited - notwithstanding the strength of its franchises, at least in France. The molecules used have long since fallen into the public domain, and their active ingredients are manufactured in China. 

Finally, and to conclude on this subject, Sanofi has been rather slow on the uptake. In this respect, the French company is merely following in the footsteps of the other major US and British pharmaceutical groups, which have already sold off their consumer healthcare activities to concentrate their investments on their biopharma activities, which are far more profitable - and useful to the community.

With that out of the way, and returning to our original area of expertise, MarketScreener points out that Opella is valued at EUR15.5 billion, a multiple of ten times the subsidiary's operating profit. By contrast, direct comparables such as Haleon, the former consumer healthcare joint venture between Pfizer and GSK, or Kenvue, formerly with J&J, are trading on the stock exchange at multiples in excess of fifteen times their operating profit.

Opella, it's true, has posted only very modest sales growth over the past five years - but neither Haleon nor Kenvue are doing any better - and an operating profit that has stagnated over the period. In this respect, the ten-times profit multiple is fair on an absolute basis; but unfortunately lower on a relative basis, i.e. compared to that commanded by the French group's competitors.

Is the discount linked to the Group's European presence? Limited pricing power in France, where the regulator is of the fussy type? Is it due to the over-concentration of its product portfolio, which, as mentioned above, is hyper-dependent on the Doliprane and Dulcolax franchises, both of which are under threat from generic competition? Probably a bit of all three.