Sanofi inks €3.9B Ablynx buyout to pip Novo in M&A fight 

Ablynx' caplacizumab vials
Ablynx's lead drug caplacizumab. (Ablynx)

Sanofi has struck a €3.9 billion ($4.8 billion) deal to acquire Ablynx. The French pharma’s €45-a-share cash bid enabled it to leapfrog Novo Nordisk in the race to buy Ablynx and land its second big-ticket takeover of the month. 

Ablynx was put in play earlier this month when Novo went public with its attempts to buy the Belgian biotech. At that stage, Novo had failed to bring Ablynx to the deal table with an offer of €28 a share plus a little more in CVRs. 

Sanofi has shown a ruthlessness absent in its earlier M&A activities to get a deal done. But it has paid a premium of more than 100% over Ablynx’s share price before Novo disclosed its desire to buy the company. The Ablynx and Sanofi boards of directors have unanimously approved the deal.

In return for the outlay, Sanofi will get a rare blood disorder drug—caplacizumab—that is closing in on approvals in Europe and the U.S. Analysts at Jefferies expect annual sales of caplacizumab to top out at $500 million and think the drug will be highly profitable. At Sanofi, the drug will slip into a growing blood disorder franchise alongside assets from its $11.6 billion Bioverativ buyout and revised deal with Alnylam.

Sanofi’s release to disclose the deal also talked up the good fit between Ablynx’s phase 2 respiratory syncytial virus candidate ALX-0171 and its Pasteur unit. And a sizable, prominent section of the statement was given over to the merits of a thing Sanofi has previously said it would be daft to buy: a platform.

In a statement this morning, “Novo Nordisk today confirms that it will not be making a revised proposal,” and that it “looks forward to continuing its productive research collaboration with Ablynx.”

RELATED: Novo makes €2.6B Ablynx buyout bid public after being rebuffed

Elias Zerhouni, M.D., Sanofi’s R&D chief, has been forthright in his skepticism about the merits of large pharma companies buying biotechs for their platforms. Yet, the first line of the statement to unveil the Ablynx deal rhapsodizes about how the biotech’s single-domain antibody platform will strengthen Sanofi's R&D strategy.

Sanofi CEO Olivier Brandicourt praised the potential of the platform, too. 

“We continue to advance the strategic transformation of our research and development, expanding our late-stage pipeline and strengthening our platform for growth in rare blood disorders. This acquisition builds on a successful existing partnership,” Brandicourt said. “We intend to maintain and support the Ablynx science center in Ghent.”

The llama-based antibody platform has proven to be a rich source of candidates to date. Ablynx has retained full control of some of the assets—most notably caplacizumab and ALX-0171—but many of its candidates are subject to deals with other companies, including AbbVie, Boehringer Ingelheim and Merck. Sanofi is also working on up to eight preclinical immuno-inflammation drugs with Ablynx.

Analysts at Jefferies put out a note this morning, saying: "We doubt counteroffers will emerge: This is the second acquisition by Sanofi this month in Orphan diseases and hematology, hot on the heels of Bioverativ (BIVV, $103, Hold) for $11.6bn. Ablynx's lead product caplacizumab for rare blood disorder acquired thrombotic thrombocytopenic purpura (aTTP) should complement this franchise, in our view. Sanofi management also states it intends to maintain and support the Ablynx facility in Ghent, Belgium, and has other R&D programs in RSV suggesting interest in anti-RSV NanoBody ALX-0171. Given these synergies and the agreed nature of the deal, we do not expect counterbids from rivals.

"Capla is a potential game-changer: Caplacizumab significantly curtails costly plasma exchange, a risky procedure, reduces the risk of exacerbations, and protects organ damage, providing a window for physicians to resolve the underlying disease acquired TTP. We expect EU approval during 3Q18E, with FDA filing shortly for 1H19E U.S. launch. We envisage highly profitable $500m WW peak sales from 70% penetration, assuming it is widely adopted as a standard-of-care, for a €24/share NPV at 100% probability.

"Pipeline has significant optionality: ALX-0171 phase 2b RSV results are anticipated 2H18E and this asset remains fully owned by Ablynx. Phase 2 results for vobarilizumab in systemic lupus erythematosus are expected 1H18E, triggering an opt-in decision by AbbVie (ABBV, $123, Buy), which would also include the arthritis indication. Focus partnered programs include two Nanobody drugs from the I-O collaboration with Merck,  likely to enter the clinic this year."