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Sanofi to Join Alzheimer's Space With Vigil Neuroscience Buyout
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French pharma giant Sanofi (SNY - Free Report) recently announced that it has agreed to acquire Massachusetts-based biotech Vigil Neuroscience (VIGL - Free Report) for a total equity value of around $470 million.
The acquisition will boost Sanofi’s neurology pipeline by adding Vigil’s investigational oral small-molecule TREM2 agonist, VG-3927, which is being developed as a potential treatment for Alzheimer’s disease.
A phase II study will evaluate VG-3927 in Alzheimer’s disease.
TREM2 is a protein key for immune cell function, particularly in the brain. Per management, activating this protein is likely to enhance the neuroprotective function of microglia in patients with Alzheimer’s disease.
Year to date, shares of Sanofi have gained 9.7% against the industry’s decline of 3.9%.
Image Source: Zacks Investment Research
SNY-VIGL's Deal Rationale
Per the latest agreement, Sanofi will acquire all the outstanding shares of Vigil for $8 per share in cash. Shares of VIGL were down around 7% on Wednesday following the announcement of the news.
Additionally, shareholders of VIGL will be eligible to receive a non-transferable contingent value right of $2 per share, which will ensure a deferred cash payment of $2 to its holder upon the first sale of VG-3927.
The transaction is expected to close in the third quarter of 2025, subject to customary closing conditions. The transaction will not impact SNY’s financial guidance for 2025.
Sanofi made a strategic investment of $40 million in Vigil in June 2024, which included an exclusive negotiation right to research, develop, manufacture and commercialize VG-3927.
While Sanofi is adding VG-3927 with the latest acquisition, the company is not acquiring Vigil’s other candidate, iluzanebart (VGL101), which is currently in mid-stage development for adult-onset leukoencephalopathy with axonal spheroids and pigmented glia, a rare and fatal neurodegenerative disease.
Marketed Drugs in the Alzheimer's Disease Space
Currently, there are two drugs approved by the FDA in the Alzheimer’s disease space — Biogen’s (BIIB - Free Report) Leqembi and Eli Lilly’s (LLY - Free Report) Kisunla. Both these drugs are approved to treat early symptomatic Alzheimer’s disease, which includes mild cognitive impairment or the dementia stage of the disease.
Leqembi is marketed by Japan-based Eisai in partnership with Biogen. LLY’s Kisunla is now approved in 13 countries.
VG-3927 is based on a different mechanism compared to that of Kisunla and Leqembi.
Both the Biogen/Eisai and Lilly drugs are based on similar mechanisms, reducing the accumulation of amyloid beta (Aβ) plaque in the brain. Aβ is a protein that is said to be the primary cause of the cognitive decline associated with Alzheimer’s disease.
Image: Bigstock
Sanofi to Join Alzheimer's Space With Vigil Neuroscience Buyout
French pharma giant Sanofi (SNY - Free Report) recently announced that it has agreed to acquire Massachusetts-based biotech Vigil Neuroscience (VIGL - Free Report) for a total equity value of around $470 million.
The acquisition will boost Sanofi’s neurology pipeline by adding Vigil’s investigational oral small-molecule TREM2 agonist, VG-3927, which is being developed as a potential treatment for Alzheimer’s disease.
A phase II study will evaluate VG-3927 in Alzheimer’s disease.
TREM2 is a protein key for immune cell function, particularly in the brain. Per management, activating this protein is likely to enhance the neuroprotective function of microglia in patients with Alzheimer’s disease.
Year to date, shares of Sanofi have gained 9.7% against the industry’s decline of 3.9%.
Image Source: Zacks Investment Research
SNY-VIGL's Deal Rationale
Per the latest agreement, Sanofi will acquire all the outstanding shares of Vigil for $8 per share in cash. Shares of VIGL were down around 7% on Wednesday following the announcement of the news.
Additionally, shareholders of VIGL will be eligible to receive a non-transferable contingent value right of $2 per share, which will ensure a deferred cash payment of $2 to its holder upon the first sale of VG-3927.
The transaction is expected to close in the third quarter of 2025, subject to customary closing conditions. The transaction will not impact SNY’s financial guidance for 2025.
Sanofi made a strategic investment of $40 million in Vigil in June 2024, which included an exclusive negotiation right to research, develop, manufacture and commercialize VG-3927.
While Sanofi is adding VG-3927 with the latest acquisition, the company is not acquiring Vigil’s other candidate, iluzanebart (VGL101), which is currently in mid-stage development for adult-onset leukoencephalopathy with axonal spheroids and pigmented glia, a rare and fatal neurodegenerative disease.
Marketed Drugs in the Alzheimer's Disease Space
Currently, there are two drugs approved by the FDA in the Alzheimer’s disease space — Biogen’s (BIIB - Free Report) Leqembi and Eli Lilly’s (LLY - Free Report) Kisunla. Both these drugs are approved to treat early symptomatic Alzheimer’s disease, which includes mild cognitive impairment or the dementia stage of the disease.
Leqembi is marketed by Japan-based Eisai in partnership with Biogen. LLY’s Kisunla is now approved in 13 countries.
VG-3927 is based on a different mechanism compared to that of Kisunla and Leqembi.
Both the Biogen/Eisai and Lilly drugs are based on similar mechanisms, reducing the accumulation of amyloid beta (Aβ) plaque in the brain. Aβ is a protein that is said to be the primary cause of the cognitive decline associated with Alzheimer’s disease.
SNY's Zacks Rank
Sanofi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.