(Bloomberg) – Sanofi agrees with US biotech company Principia Biopharma Inc. for about $ 3.4 billion, as the French drugmaker turns to innovative therapies to boost growth under new Chief Executive Officer Paul Hudson. The deal with full cash will see Sanofi take full control of the company, which focuses on treatments for multiple sclerosis and a range of autoimmune disorders, according to a statement Monday. Bloomberg reported last month that Sanofi was studying potential acquisitions from U.S. biotechnology companies, including Principia.
Sanofi will pay $ 100 per share, according to the statement, representing a premium of 10% over Friday’s closing price of Principia shares, which have jumped nearly 66% this year. The total share value of the deal is about $ 3.7 billion, including cash from Principia, according to Sanofi.
Sanofi shares rose as much as 0.7% in Paris on Monday. Principia climbed as much as 11% in U.S. pre-market trade.
The deal is the second-largest pharmaceutical acquisition this year after Gilead Sciences Inc. agreed to pay $ 4.9 billion for cancer therapy maker Forty Seven Inc. in March, and will provide Sanofi with a pipeline of drugs known as BTK inhibitors that Principia is developing to treat autoimmune disorders. Hudson is trying to rejuvenate the company in Paris by focusing on fast-growing areas where new drugs contain high prices.
The move follows the pharma giant’s pact in December to replace Synthorx Inc. to buy for $ 2.5 billion, and analysts say the company has the fireworks for more transactions. Hudson announced a new strategy for Sanofi late last year, saying it would end its hunt for new diabetes and heart disease drugs, help save more than $ 2 billion, and focus on areas ripe for innovation such as cancers.
Rare diseases
The deal shows how pharmaceutical companies like Sanofi must continue to hunt for new drivers of growth, even as they race to find vaccines and therapies to try to defeat Covid-19.
With the new deal, Sanofi will secure drugs such as the BTK inhibitor SAR442168 for multiple sclerosis and other diseases of the central nervous system. It was found that patients with multiple sclerosis benefited in the Phase 2 studies in February, prompting Hudson to say that the treatment could cover half of the $ 20 billion market for therapies for the incurable disease.
What Bloomberg Intelligence says:
Sanofi’s $ 3.4 billion acquisition of Principia Biopharma provides complete control of multiple sclerosis drug SAR442168, with strong Phase II data, but which we consider to be a risky mechanism. It is also an unusual move, as pharma companies do not tend to buy biotechs where they have licensed medicines before having Phase III data. However, the cash price is only about 30% of the $ 12 billion from the sale of Regeneron shares in May.
Sam Fazeli, BI Pharmaceutical Analyst
Sanofi doubles down on Principia’s risky MS drugs unusual: react
Principia, based in San Francisco, is developing a therapy called rilzabrutinib to treat conditions of the immune system, according to its website, and evaluates the use of drugs in patients with pemphigus, a group of rare diseases that cause skin blisters and mucous membranes.
“Through this acquisition, we will be able to expand the development of BTK inhibitors and accelerate across multiple indications,” said John Reed, head of research at Sanofi, in the statement.
Other companies are targeting similar therapies – such as AstraZeneca Plc’s Calquence and AbbVie Inc.’s Imbruvica – against cancer.
The American company is a ‘good fit’ for Sanofi, analysts at Guggenheim said last month after it was said among those studying the French drugmaker.
Sanofi was able to spend as much as $ 50 billion on acquisitions following announcing the divestment of its stake in Regeneron Pharmaceuticals Inc., Bloomberg Intelligence said in May. In addition to technologies for cancer and gene therapy, their goals could include immunology assets, analysts at Bank of America Corp. wrote.
Sanofi has the potential for several different multi-billion dollar transactions, according to Jefferies.
(Updates with shares in fourth paragraph)
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