Sorry Novo: Sanofi wins Ablynx over with $4.8B buyout bid, bagging nanobody platform tech

Olivier Brandicourt

Sanofi $SNY has struck again — this time acquiring Ablynx, the Belgian biotech that has turned down two previous bids by Novo Nordisk, for $4.8 billion.

The French drugmaker agreed to pay a whopping $55.81 per share to swallow Ablynx’s antibody technology, almost 50% higher than Novo’s $33.60 per share offer. Investors clearly liked how Ablynx held out, sending its shares $ABLX up 17% in premarket trading.

Edwin Moses

The deal gives Sanofi Ablynx’s lead drug caplacizumab, which has shown considerable promise in treating the ultra-rare blood clotting disorder acquired thrombotic thrombocytopenic purpura (aTTP). That’s in addition to the hemophilia treatments Sanofi is going to bag in the $11.6 billion acquisition of Bioverativ, announced just last week.

“With Ablynx, we continue to advance the strategic transformation of our Research and Development, expanding our late-stage pipeline and strengthening our platform for growth in rare blood disorders,” said Sanofi CEO Olivier Brandicourt.

Ablynx had worked hard for a bigger deal. After rejecting Novo’s unsolicited offer, Ablynx and its advisers had reached out to Sanofi and other potential suitors including Merck and Roche to gauge interest, Bloomberg reported. In doing so, Ablynx was able to almost quadruple the $1.3 billion market cap it set just last fall with a successful IPO.

That will go a long way to further bolstering biotech valuations as M&A gets off to a boisterous start in 2018.

Seamus Fernandez at Leerink notes:

In its press release, SNY noted that it expects the acquisition to be neutral to 2018-19 EPS. In our view, SNY’s aggressiveness in M&A may precede a more robust period of deals within biopharma as the effects of US tax reform are felt and valuations for late stage assets continue to drive higher.

The big question now is how Sanofi will handle the kind of innovative tech it’s acquiring. While benefiting enormously from its alliance with Regeneron, its own in-house R&D ops have been plagued by a reputation for their inability to produce anything of real consequence aside from Dengvaxia over the past 10 years — and that imploded due to safety issues.

Elias Zerhouni

Brandicourt made it clear that he was pumped about the chance of buying not just some clinical-stage assets, but the platform as well. It is, noted R&D chief Elias Zerhouni, “a proven discovery engine.” Zerhouni complimented the nanobody platform.

Ironically, though, the buyout of a platform company is a complete about face for Zerhouni, who has focused on licensing deals and alliances with a range of biotechs. Platform acquisitions, he said, are an invitation to disaster. He bluntly told Endpoints News editor John Carroll two years ago:

Every company that acquires a platform company kills it.

That opinion, though, has clearly evolved.

“As we look ahead, we believe Sanofi’s global infrastructure, commitment to innovation and commercial capabilities will accelerate our ability to deliver our pipeline,” said Ablynx CEO Edward Moses.

Like several other pharma giants, Sanofi is already partnered with Ablynx, having paid a modest $28 million in July and promised up to $2.8 billion in milestones. Ablynx is known for a platform tech of small “nanobodies,” a sliver of the size of regular antibodies — making them better built for some diseases.

In Brandicourt’s words, this is also a statement on geographical strategy:

We are also pleased to reaffirm our commitment to Belgium, where we have invested significantly over the years in our state-of-the-art biologics manufacturing facility in Geel. We intend to maintain and support the Ablynx science center in Ghent.

With contribution by John Carroll.

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