Sanofi is making big deals again, as chief executive Olivier Brandicourt agreed to pay $11.6bn for a Biogen Inc spinoff a little more than a year after his last takeover attempt floundered.
The French drug maker will pay $105 a share for Bioverativ Inc, a maker of drugs for haemophilia, the companies said yesterday in a statement. Sanofi’s biggest transaction in seven years represents an effort to branch out into treatments for the blood disorder, which still command lofty prices as prices for the company’s diabetes drugs face increased pressure.
Brandicourt’s return to the merger dance after two failed deals displeased investors, who sent the stock down to the lowest level in more than 12 months, yet more transactions may still be on the way. Sanofi has said that deals for as much as €20bn were possible, and as sales of its best-seller Lantus slump, the company could be a suitor for Pfizer Inc or Merck KGaA’s consumer-health divisions, said Sebastien Malafosse, an analyst at Oddo-BHF in Paris.
“You might think there’s still 10bn more euros to spend,” Malafosse said.
Brandicourt said in November that Sanofi would invest in its consumer-health business and evaluate acquisition opportunities in the sector. The Paris-based company is seeking new avenues of growth — much like rival Novo Nordisk, which two weeks ago made its largest takeover offer ever for another maker of medicines for blood disorders, Ablynx NV.
Acquisitions are critical for Sanofi given the headwinds in diabetes, which could weigh on profit this year, according to Bloomberg Intelligence analysts Sam Fazeli and Michael Shah.
Since joining in 2015, Brandicourt hasn’t made any major deals. He tried at least twice, but failed to reel in the rare-disease player Actelion Ltd in 2016 after earlier whiffing on cancer-drug maker Medivation Inc.
Bioverativ will give Sanofi access to haemophilia doctors and patients as it pushes forward with fitusiran, the experimental haemophilia therapy for which it acquired global rights this month.
The price, a 64% premium over Friday’s close for Bioverativ, would only be justified if the target’s growth rate was sustainable, and it likely isn’t, Emmanuel Papadakis, an analyst at Barclays in London, wrote in a note to clients.
“We think this is the wrong deal,” he said in the note.
Revenue for Waltham, Massachusetts-based Bioverativ increased 27% in the third quarter. Its main drugs, Eloctate and Alprolix, treat the two most common types of haemophilia and in 2016 brought in $847mn in sales, according to filings.
Unlike in diabetes, where US health insurers and pharmacy benefit managers have squeezed drug makers, the field of haemophilia has been relatively exempt from price pressures. “It’s an area where you have huge pricing power,” according to Oddo’s Malafosse.
Sanofi shares fell as much as 3.8% in Paris, the most intraday since June 2016, and traded at 70.74 euros as of 12:23 p.m.