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Sanofi is limiting its focus on drug development, stopping its diabetes and cardiovascular research.
Joel Saget / AFP via Getty Images
French pharmaceutical giant Sanofi is digging into the cash it raised earlier this year with the sale of its $ 11.7 billion stake in Regeneron Pharmaceuticals,
the biotech company Principia Biopharma refurbished in a deal announced Monday morning with $ 3.7 billion.
Shares of Principia (ticker: PRNB) are up 65.6% this year amid speculation over a purchase. The company, which does not have approved products, is developing drugs to treat multiple sclerosis, including immune-mediated diseases.
The deal gives Sanofi (SNY) full ownership of a multiple sclerosis medication called SAR442168 that it was developed in collaboration with Principia.
“This acquisition continues our ongoing R&D transformation to accelerate the development of the most promising drugs that will address key patient needs,” Sanofi CEO Paul Hudson said in a statement.
In a note Monday morning, HC Wainwright & Co. analyst Joseph Pantginis suggested the deal was not unexpected, writing: “Morning surprise … Well not really.”
Sanofi will pay $ 100 per share in cash to Principia. The stock closed at $ 90.74 on Friday and traded at $ 99.25 on Monday morning.
Shares of Sanofi were up 1.7% on Monday morning, while shares of Principia were up 9.4%. The S&P 500 was up 0.2%. Sanofi’s sponsored US deposit receipts are trading at 13.8 times revenue expected over the next 12 months, close to the 5-year average of 13.4 times revenue, according to FactSet. Of the 22 analysts who handle the stocks that follow through FactSet, 15 rate it a Buy and 7 rate it a Hold.
Shares of Sanofi are up 0.3% this year. Hudson, who took office last fall, has outlined a plan that includes limiting her focus on drug development, stopping her diabetes and cardiovascular research. The company bought the immuno-oncology-focused biotech Synthorx in December for $ 2.5 billion. The sale of a major stake in Regeneron gave it cash and led to speculation as to which companies it intended to acquire.
The Principia deal begins to answer this question. The company’s focus on immune-mediated diseases, and in particular multiple sclerosis, coincides with Sanofi’s existing business lines. The company sells a number of drugs for multiple sclerosis, including Lemtrada and Aubagio.
The Principia drug SAR442168, a so-called BTK inhibitor, is in a Phase 3 study in patients with multiple sclerosis. Another Principia BTK inhibitor, called rilzabrutinib, is in Phase 3 studies in patients with pemphigus, a rare autoimmune disease, and is expected to be tested in a Phase 3 trial in patients with immune thrombocytopenia, a bleeding disorder.
Write to Josh Nathan-Kazis at [email protected]
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