Sanofi to Buy U.S. Developer of Multiple Sclerosis Treatment -- 2nd Update
August 17 2020 - 1:51PM
Dow Jones News
By Peter Stiff and Joseph Walker
Sanofi SA has agreed to buy Principia Biopharma Inc. in a deal
that values the developer of a promising multiple sclerosis
treatment at $3.68 billion, the health-care giant's latest move to
focus more on specialty therapies over mass-market medicines.
The French company said the purchase would give it full control
over the MS treatment that the two companies were already
codeveloping, simplifying commercialization plans and eliminating
the need to pay future royalties.
The deal is part of a research and development shake-up at
Sanofi that is shifting its focus away from its traditional
strengths in common ailments like diabetes and heart disease toward
medicines for more rare diseases and cancer, where companies can
command heftier prices.
"This acquisition advances our ongoing R&D transformation to
accelerate development of the most promising medicines that will
address significant patient needs," Sanofi Chief Executive Paul
Hudson said.
More broadly, Sanofi said the deal would strengthen its R&D
work in autoimmune and allergic diseases, and allow it to develop
the technology behind the MS drug for use in other central nervous
system diseases and therapeutic areas.
The deal will also hand Sanofi a therapy called rilzabrutinib,
which is currently in Phase 3 trials for patients with pemphigus, a
rare autoimmune disease that causes blistering of the skin.
Under the deal, Sanofi agreed to pay $100 a share for San
Francisco-based Principia, a 10% premium on its closing price
Friday. Principia's shares have risen more than 65% so far this
year on speculation of a possible takeover, potentially by
Sanofi.
Sanofi and Principia have been working together since 2017 under
a deal that gave Sanofi exclusive rights to sell the medicine,
code-named SAR442168, around the world in exchange for
royalties.
The drug posted upbeat Phase 2 trial data in MS patients earlier
this year, and Phase 3 trials started in June. Sanofi aims to apply
for regulatory approval in the first half of 2024.
Geoffrey Porges, a SVB Leerink analyst, said in a note to
investors on Monday that the deal was too good for Sanofi to pass
up. Under the terms of the companies' 2017 agreement, Sanofi could
have wound up paying $4 billion in total royalties and other
payments for SAR442168 alone, Mr. Porges estimated.
The drug is among a class of medicines that block a protein,
called Bruton's tyrosine kinase, involved in the immune system that
can play a role in certain diseases.
The so-called BTK inhibitors have been successful at treating
certain types of cancer and lucrative for drugmakers. AbbVie Inc.'s
BTK drug Imbruvica had global sales of $4.7 billion last year.
Sanofi has competition in bringing to market the first BTK
inhibitor for multiple sclerosis, a disease in which the immune
system attacks the body's nerve endings, causing pain, fatigue and
mobility problems. Germany's Merck KGaA is conducting a Phase 3
study of a BTK inhibitor for multiple sclerosis, and Biogen Inc.
has a BTK drug in Phase 1 development.
Sanofi's Mr. Hudson said on a conference call with analysts
Monday that taking full control of the drug means that
"economically and executionally we can move faster."
Mr. Hudson took the helm of Sanofi in September and has since
set out plans to focus the company's research pipeline on the
more-lucrative areas of rare diseases and cancer, pivoting away
from historically strong areas such as treatments for
cardiovascular disease and diabetes.
Under those plans, Sanofi has said it would stop investing in
diabetes research, while bolstering its oncology business with the
$2.5 billion acquisition of biotech Synthorx Inc.
Analysts expect Sanofi could be in the market for further
acquisitions in specialist disease areas, with the sale of its
long-held stake in Regeneron Pharmaceuticals Inc. earlier this year
giving the company a sizable war chest for deals.
Write to Peter Stiff at peter.stiff@wsj.com and Joseph Walker at
joseph.walker@wsj.com
(END) Dow Jones Newswires
August 17, 2020 13:36 ET (17:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From Sep 2023 to Sep 2024