Paris — Sanofi agreed to acquire US biotech company Principia Biopharma for about $3.4bn as the French drugmaker pivots towards innovative therapies to spur growth under new CEO Paul Hudson.

The all-cash deal will see Sanofi taking full control of the company, which focuses on treatments for multiple sclerosis and a range of autoimmune disorders, according to a statement on Monday.

Sanofi will pay $100 per share, according to the statement, representing a 10% premium over the Friday closing price of Principia’s shares, which have jumped nearly 66% in 2020. The aggregate equity value of the deal is about $3.7bn, including Principia’s cash, according to Sanofi.

Sanofi shares rose as much as 0.7% on Monday in Paris. Principia climbed as much as 11% in US premarket trading.

The deal is the second-largest pharmaceutical acquisition this year after Gilead Sciences agreed to pay $4.9bn to buy cancer therapy maker Forty Seven in March, and will give Sanofi a pipeline of drugs known as BTK inhibitors that Principia is developing to treat autoimmune disorders. Hudson is trying to rejuvenate the Paris-based company by focusing on fast-growing areas where new medicines command high prices.

The move follows the pharma giant’s pact in December to buy Synthorx for $2.5bn, and analysts say the company has the firepower for more transactions. Hudson late in 2019 announced a new strategy for Sanofi, saying it would end its hunt for new diabetes and heart disease drugs, helping save more than $2bn, and focus on areas that are ripe for innovation such as cancer.

Rare diseases

The deal shows how drug companies such as Sanofi need to keep hunting for new drivers of growth even as they race to find vaccines and therapies to try to defeat Covid-19.

With the new deal, Sanofi will secure drugs such as the BTK inhibitor SAR442168 for multiple sclerosis and other central nervous system diseases. It was found to have benefited patients with multiple sclerosis in phase two trials in February, prompting Hudson to say the treatment could grab half of the $20bn therapies market for the incurable disease.

Principia, based in San Francisco, is developing a therapy called rilzabrutinib for the treatment of immune-system conditions, according to its website, and is evaluating the medicine’s use in patients with pemphigus, a group of rare diseases that cause blistering of the skin and mucous membranes.

“Through this acquisition, we will be able to expand and accelerate development of BTK inhibitors across multiple indications,” John Reed, Sanofi’s research head, said in the statement.

Other companies are aiming similar therapies — such as AstraZeneca’s Calquence and AbbVie’s Imbruvica — against cancer.

The US company is a “good fit” for Sanofi, analysts at Guggenheim said in July after it was said to be among those the French drugmaker was studying.


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