Sanofi takes over Bioverativ in US$ 11.8 bn deal

Seven years after the acquisition of Genzyme, French drug major Sanofi has added another orphan drug player to its portfolio. The company agreed with the management of US blood disorder expert Bioverativ to pay US$11.6bn in cash, a 64% premium on the company’s share price.

The deal will boost Sanofi’s pipeline in the growing hemophilia and orphan blood disorders market. Biogen hemophilia spin-out Bioverativ has two hemophilia treatments on the market: Eloctate (efmoroctocog alfa) – a first-in-class recombinant clotting factor VIII therapy with prolonged half-life to treat hemophilia A that was licenced from SOBI. Eloctate is a fusion protein of factor VIII to the Fc portion of immunoglobulin G 1 that benefits of a natural recycling mechanism of immunoglobulins. By binding of IgG1 to the neonatal Fc receptor, the fusion protein becomes protected from lysosomal degradation, because it is cycled back into circulation to extend the time the therapy remains in the body. Alprolix (eftrenonacog alfa), Bioverativ’s treatment for haemophilia B benefits from the same mechanism, but is a fusion of  recombinant clotting factor IX therapy and IgG1. Additionally, Bioverariv has two clinical (Phase I + II/III) and three preclinical programmes in its pipeline, one of which with genome editing pioneer Sangamo Biosciences. The long-acting drugs are expected to better prevent bleeding episodes than shorter acting recombinant factors.

Under the agreement, Sanofi will acquire all outstanding shares of Bioverativ for US$ 105 per share in cash, totalling $ 11.6 bn on a fully diluted basis. “Together, we have a great opportunity to bring innovative medicines to patients worldwide, building on Bioverativ’s success in driving new standards of care with its extended half-life factor replacement therapies,” commented Olivier Brandicourt, Sanofi’s Chief Executive Officer.

With approximately US$10bn in annual sales, hemophilia represents the largest market for rare diseases and is expected to grow above 7% per year through 2022. In 2016, Bioverativ generated $847m in sales and $41m in royalties.

Sanofi most recently acquired the global development and commercialization rights to fitusiran, an investigational RNA interference (RNAi) drug to treat hemophilia A and B, from Alnylam Pharmaceuticals. Following a clinical hold for the drug, Sanofi wants Bioverativ to develop the Phase III drug candidate further and bring it to the market.

Sanofi said, the Bioverativ acquisition was part of the company’s  2020 roadmap to “reshape the portfolio” towards programmes that have the potential to give the company leadership in certain indications.  The acquisition is expected to be immediately accretive to Sanofi’s Business EPS in FY2018 and up to 5% accretive in FY2019. Sanofi is also projected to achieve ROIC in excess of cost of capital within three years. Sanofi expects to preserve its strong credit rating.

 

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