Sanofi To Buy Biotech Firm, Synthorx For $2.5 Billion

Biotechnology firm headquartered in California, Synthorx is to be bought by France's Sanofi SA for a whooping sum of $2.5 billion. Sanofi agreed to the deal on Monday, December 9th, 2019, as it aims to move higher in the lucrative field of cancer drugs under its current Chief Executive Officer.

Sanofi will be purchasing the outstanding shares of Synthorx at a price of $68 per share in cash, that is a 172% premium to the closing price of Synthorx's shares on the 6th of December. For the net year of 2018, Synthorx revealed that it had a net loss of $56.6 million. Both Sanofi and Synthorx trade on the Nasdaq Index as (NASDAQ: SNY) and (NASDAQ: THOR) respectively.

Recent Highlights from Synthorx’s Third Quarter 2019

·       Administration (FDA) cleared for THOR-707 an investigational new drug (IND) application for THOR-707 in solid tumors.

·       Presented preclinical data on THOR-707 at ESMO 2019 Congress: In September, Synthorx presented preclinical data at the European Society for Medical Oncology (ESMO) 2019 Congress demonstrating the pharmacologic properties of its lead immuno-oncology product candidate, THOR-707, a recombinant not-alpha interleukin-2 (IL-2) cytokine for the treatment of solid tumors.

·       Presented on THOR-809 at 2019 World Congress of Inflammation:  Synthorx presented its approach to utilizing its first-of-its-kind Expanded Genetic Alphabet platform technology to engineer THOR-809 for the treatment of autoimmune disorders at the 2019 World Congress of Inflammation. THOR-809 is a site-specific, covalently-bound, monopegylated IL-2 Synthorin that selectively expands peripheral CD4+ regulatory T cells (Tregs) without expanding conventional effector and helper T cells (Tcons) in preclinical models.  This information was found on Synthorx's website. 

Paul Hudson, the Chief Executive Officer of Sanofi in a statement said, "this acquisition fits perfectly with our strategy to build a portfolio of high and quality assets and to lead with innovation, as you will hear at Capitals Day tomorrow. Additionally, it is aligned with our goal to build our oncology franchise with potentially practice-changing medicines and novel combinations." 

Sanofi, the French multinational pharmaceutical company which is headquartered in Paris, is the world's fifth-largest prescription sales company ( based on a 2013 report). The company is primarily concerned with research and development, manufacturing and marketing of pharmaceutical drugs, mainly in the prescription markets. The company was established in 2004 as Sanofi-Aventis, based on the merger of Aventis and Sanofi-Synthelabo, of which each were products of previous mergers. The name officially became known as Sanofi in May 2011. Synthorx is a clinical-stage biotechnology company that focuses on therapies for people with cancer and auto-immune diseases.

The successful purchase is expected to be completed by the first quarter of the coming year, 2020. Under the current CEO, Sanofi will conduct some strategy reviews. The CEO will give pointers on which businesses he intends to focus on at the investor day tomorrow, December 10 in Cambridge. CEO, Hudson says, "I think we have the right resources, although perhaps not the right places." According to Reuters, an early sign of the new strategy was the selling off of its Seprafilm unit to Baxter International, a medical supply company for the sum of $350 million in cash.

This deal has attracted investors who feel that buying the company at $2.5 billion is quite high. In a note, Liberum Analysts said, "the acquisition price is full at a 172% premium to Synthorx Dec. 6 closing price and is a lot to pay for an early-stage pipeline (lead drug THOR-707 is in its phase 1 trial)." At about 10 pm on Friday, the shares of Sanofi were down at 0.7% and at 82.94 Euros.

Currently, we do not know how well Sanofi will perform after it finally concludes its deal with Synthorx in the first quarter of 2020, however, Investing Port will keep up with the tabs and follow up on performance of the company stocks as time goes on.