Sanofi bolsters immuno-oncology pipeline with $2.5-billion deal to buy Synthorx

Sanofi entered into a definitive agreement to acquire all of the outstanding shares of Synthorx for $68 per share in cash, representing an equity value of approximately $2.5 billion, the companies announced Monday. The transaction, which has been unanimously approved by both boards of directors, will expand Sanofi's immuno-oncology pipeline with the addition of Synthorx's lead drug THOR-707.

"This acquisition fits perfectly with our strategy to build a portfolio of high-quality assets and to lead with innovation," remarked Sanofi CEO Paul Hudson, adding that the purchase is also "aligned with our goal to build our oncology franchise with potentially practice-changing medicines and novel combinations."

THOR-707, a variant of interleukin-2 (IL-2), is in clinical development in multiple solid tumour types as a single agent and in combination with immune checkpoint inhibitors, while Synthorx's pipeline also includes earlier-stage cytokine programmes. Sanofi said it expects IL-2 to become "a foundation" of future immuno-oncology combinations, whilst also offering combination opportunities with its other clinical and preclinical oncology assets, including with PD-1, CD-38 and molecules that modulate effector T-cells and natural killer cells.

"By selectively expanding the numbers of effector T-cells and natural killer cells in the body, THOR-707 can be combined with our current oncology medicines and our emerging pipeline of immuno-modulatory agents for treating cancer," commented John Reed, global head of R&D at Sanofi. Moreover, he said Synthorx's pipeline of engineered lymphokines holds "great promise not only for oncology, but also for addressing many autoimmune and inflammatory diseases."

The transaction, which represents a premium of 172% to Synthorx's closing price on December 6, is expected to close in the first quarter of 2020. However, Liberum analysts suggested the amount is "a lot to pay for an early-stage pipeline."

The deal to buy Synthorx comes ahead of Sanofi's capital markets day on December 10, at which Hudson is expected to provide an update on the company's strategy. The CEO, who took over the helm on September 1, previously indicated that significant changes are coming, saying recently "I am bringing a little sense of urgency and prioritisation. I think we have the right level of resources although perhaps not always in the right place."

Last month, Muzammil Mansuri, head of strategy and business development at Sanofi, retired from the company, with Alban de La Sablière, head of business development, and Laurent Van Lerberghe, head of strategy, taking on more responsibilities as of December 1. Meanwhile, sources recently suggested that Sanofi is exploring various options for its consumer health unit, including a potential outright sale, having also agreed last week to divest its Seprafilm adhesion barrier and related assets to Baxter for $350 million in cash.  

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