French pharmaceutical group Sanofi will acquire its partner Translate Bio for $3.2bn, as it makes a big bet on the future of mRNA as a transformative technology for vaccines and therapeutics.
Paul Hudson, Sanofi’s chief executive, said the deal would allow the companies to accelerate existing development programmes, including for Covid-19 and flu vaccines, and pursue new opportunities.
“Our goal is to unlock the potential of mRNA in other strategic areas such as immunology, oncology, and rare diseases in addition to vaccines,” he said.
Translate Bio, based in Massachusetts, has potential drugs for cystic fibrosis and other rare lung diseases in its early stage pipeline and is examining areas such as liver conditions and oncology.
Sanofi is trying to catch up with rivals Pfizer, BioNTech and Moderna, after their Covid-19 vaccines proved that mRNA could create highly effective vaccines. They used the pandemic to win the first approvals for mRNA vaccines and expand production facilities.
Sanofi’s Covid-19 vaccine efforts are lagging behind. Its development of a recombinant protein vaccine, boosted by an adjuvant from GlaxoSmithKline, is in a phase 3 trial, while its programme with Translate Bio is in an earlier phase 1/2 study, with results expected in the third quarter.
Sanofi created a war chest for potential deals last year when it sold half its 20.6 per cent stake in Regeneron for $6.1bn. Hudson, who took over in 2019, set out a new strategy for Sanofi focusing in growth areas such as oncology and rare diseases.
The boards of Sanofi and Translate Bio have unanimously agreed the deal. Sanofi will start a cash tender offer to acquire all outstanding shares of Translate Bio at $38, about a 10 per cent premium to its closing price on Monday. Sanofi said it was a 56 per cent premium to the volume-weighted average share price over the past 60 days.
The Baupost Group, a Boston-based hedge fund that is the company’s largest shareholder, has signed a binding commitment to support the tender offer, as has Translate Bio’s chief executive, Ronald Renauld.
Renauld said the acquisition would help Translate Bio achieve mRNA’s full potential.
“With Sanofi’s longstanding expertise in developing and commercialising vaccines and other innovative medicines on a global scale, Translate Bio’s mRNA technology is now even better positioned to reach more people, faster,” he said.