Sanofi to Offload Stake in Regeneron -- WSJ
By Denise Roland
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 28, 2020).
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
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
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
"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
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May 28, 2020 02:47 ET (06:47 GMT)
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