Sanofi has struck a deal to buy Flexion $FLXN and the pain drug it now has under review at the FDA, according to a scoop in FiercePharma.
While final terms were still being negotiated, according to the FiercePharma report by Tracy Staton, the online business news site quoted a source close to the deal who says that the pharma giant is now doing due diligence after coming to terms with the Burlington, MA-based biotech for an all-cash deal. Their price is in the “mid-30s,” well over 50% higher than this morning’s $19.68 price.
No deal has been completed yet and there are no guarantees that the buyout will be wrapped. Mike Clayman is CEO at Flexion.
News of the deal spread fast, sending Flexion’s shares shooting up 32% – and climbing – in minutes.
A Sanofi spokesperson declined comment when I contacted the company. Flexion did not respond immediately.
Flexion opened this morning with a market cap of $624 million, much of it based on the value of Zilretta (FX006). The drug has passed a Phase III test for treating osteoarthritis of the knee and was filed at the FDA last December. If approved, the drug could be launched by Genzyme in the fall.
Genzyme currently markets Synvisc, which was approved for osteoarthritis back in 2009.
A deal like this would mark a change of pace for Sanofi, which has tried at least two other recent acquisitions, only to be denied at the end by a rival. Sanofi CEO Olivier Brandicourt was aced out of the Medivation deal by Pfizer, which paid $14 billion for the company. And Actelion went to J&J for $30 billion after Sanofi execs managed to irritate the powers that be at the Swiss company.
A deal for Flexion would amount to a relatively small but reliable bolt-on buyout for Sanofi, which needs to prove that it can close on a negotiation. It would also mark a big payout to investors who have backed this company through the development phase.
The best place to read Endpoints News? In your inbox.
Comprehensive daily news report for those who discover, develop, and market drugs. Join 35,300+ biopharma pros who read Endpoints News by email every day.Free Subscription