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

Olivi­er Brandi­court

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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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And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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