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Sanofi to Buy Immunology Firm Principia Biopharma for $3.7B

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Sanofi (SNY - Free Report) announced a definitive agreement to buy San Francisco-based late-stage biotech Principia Biopharma  for $100 per share in cash for an aggregate equity value of approximately $3.68 billion. The purchase price represents a premium of around 10% on Principia’s Friday’s closing price. The board of directors of both the companies have approved the transaction.

Principia has two late-stage Bruton tyrosine kinase (BTK) inhibitors for immune-mediated diseases, SAR442168 and rilzabrutinib, in its pipeline, which Sanofi believes have a ‘pipeline in a product’ potential. 

SAR442168 has just entered phase III development in patients with multiple sclerosis, with the first patient enrolled in June. The phase III program comprises four pivotal clinical trials across the disease spectrum. In phase II studies, the candidate reduced Gd-enhancing T1 hyperintense lesions by 85% in patients with multiple sclerosis compared to placebo.

Sanofi can now explore the candidate in other central nervous system diseases and therapeutic areas. Moreover, Sanofi in-licensed global rights to SAR442168 from Principia in 2017. If the acquisition gets through, Sanofi will gain full control of the candidate and can eliminate future royalty payments

Rilzabrutinib is an oral BTK inhibitor being evaluated in a phase III study for moderate-to-severe pemphigus, a rare skin disorder that causes lesions in the skin and in the mucous membranes. Another phase III study in immune thrombocytopenia, a blood disorder that causes high risk of bleeding events, is expected to be initiated this year. Another BTK inhibitor, a topical agent is in phase I studies for immune-mediated diseases.

So far this year, Sanofi’s shares have risen 0.2% against the industry’s 0.4% decline.

 

 

Sanofi has significantly stepped up its acquisition and alliance activity over the years. Some key acquisitions include Genzyme Corporation in 2011, Chattem in 2010, and Ablynx and Bioverativ in 2018. In early 2020, Sanofi bought small cancer biotech Synthorx, which added its lead pipeline asset, THOR-707 to Sanofi’s immuno-oncology portfolio.  In 2017, it swapped its Merial Animal Health businesses with Boehringer Ingelheim’s Consumer Healthcare (CHC) business. Sanofi has developed and markets Dupixent, Kevzara, Praluent and Libtayo in collaboration with Regeneron (REGN - Free Report) .

Sanofi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked large cap pharma stock is Roche (RHHBY - Free Report) , which has a Zacks Rank #2 (Buy). Its earnings estimates have risen 2.3% for 2020 and 4% for 2020 over the past 30 days. The stock has risen 4.7% this year so far.

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