M&A

Sanofi finally manages to close on a buyout – but it’s not a game changer

Sanofi $SNY has finally managed to complete a buyout — though it’s a far cry from the kind of transformational blockbuster deal it’s been on the hunt for.

After missing out on auctions for Medivation and Actelion, the French pharma giant has snagged Protein Sciences and its quadrivalent flu vaccine Flublock, approved last fall. Sanofi is paying $650 million in cash and offering up $100 million more in milestones.

The company will now become part of the Sanofi Pasteur business, which had seen the flu vaccine from Protein Sciences as a rival.

The Meriden, CT-based biotech had developed the vaccine using a process that doesn’t require eggs, banking on insect cells instead in a process that helped it gain a rep as the vaccine of choice among people who are allergic to eggs. But that’s not the market they were looking for. Instead, by tackling four strains of the flu virus, the company looked to broaden its appeal and offered up data to back up its claims as a more reliable choice — with more active ingredient — than vaccines from Sanofi and GlaxoSmithKline for older people and individuals with a compromised immune system.

Sanofi’s new deal will not be close to enough to satisfy analysts and investors who believe that CEO Olivier Brandicourt needs to find a game-changing deal to help revive its fortunes. Brandicourt, though, has been reluctant to pay the blockbuster prices that biotechs fetch these days. Sanofi has reportedly been involved in takeover talks with Flexion $FLXN, but so far there’s been no deal and the biotech’s share price fell back to earth as expectations gradually deflated.

“Protein Sciences was actively looking for an opportunity to grow its business, particularly in the US,” said Manon MJ Cox, the CEO at Protein Sciences, in a prepared statement. “As part of Sanofi Pasteur, we expect our Flublok influenza vaccine to benefit from Sanofi Pasteur’s expertise in the field of influenza vaccines.”


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RAPS Regulatory Convergence 2017