With $3.2B, Sanofi takes in mRNA partner Translate Bio in buyout deal

With $3.2B, Sanofi takes in mRNA partner Translate Bio in buyout deal

After being left out of the COVID-19 vaccine race despite having an early investment in mRNA technology, which would go on to give the world two vaccines in record-breaking time, Sanofi has struck a deal to buy its mRNA partner Translate Bio in a $3.2 billion deal.

News of the deal comes weeks after Sanofi revealed plans to reallocate $476 million a year to a new mRNA Center of Excellence.

The French Big Pharma’s interest in mRNA predates the pandemic. In 2018, it paid $45 million upfront to team up with Translate, but its focus on mRNA has intensified since the crisis began to validate the power of the technology. Sanofi paid Translate $425 million to expand the 2018 pact in the early months of the pandemic and has now decided to buy its partner outright.

Translate accepted a $38 a share cash offer from Sanofi. Translate’s stock was trading around $29 yesterday, but shot up to $50 in after-hours trading on the back of media reports that a Sanofi deal was close. The reports lacked financial terms.

Sanofi framed the acquisition as a way to accelerate the programs it licensed from Translate and the establishment of its mRNA Center of Excellence. The partners have mRNA vaccines for COVID-19 and influenza in the clinic and programs targeting other viral and bacterial pathogens in discovery. Interim phase 1/2 results from the COVID-19 program are expected in the third quarter, and interim phase 1 data for the influenza program in the fourth, according to SVB Leerink analysts in a report.

By bringing those programs in-house, Sanofi hopes to cement its position as a competitor in the nascent mRNA space. Though Translate’s technology does not have the same recognition as that from Moderna and BioNTech, Leerink analysts noted that it does have a clinically validated and vaccine-ready lipid nanoparticle technology with utility in pulmonary, hepatic and intramuscular applications as well as significant in-house manufacturing capacity.

Also, while Moderna and Pfizer-BioNTech are dominating the COVID-19 part of the market, earlier this year, Sanofi and Translate became the first companies to start testing a seasonal mRNA flu vaccine in humans. That trial is testing a monovalent vaccine, but a quadrivalent version is in the works.

Buying Translate will also give Sanofi ownership of programs outside of the scope of its alliance with the biotech, including a cystic fibrosis candidate that delivered phase 1/2 data earlier this year. The data underwhelmed investors. Sanofi only briefly mentioned the program in its statement to disclose the planned takeover.

Sanofi previously acquired Tidal Therapeutics for $160 million upfront plus up to $310 million in milestones. The Tidal takeover gave Sanofi mRNA research capabilities in immuno-oncology and inflammatory diseases.

Through the deals, Sanofi has established itself as one of the leading Big Pharma companies in a mRNA space previously dominated by well-financed biotechs; although, with Novartis’ chairman saying “every research company is questioning whether they should invest more in this area,” it could be joined by more of its peers in the future.

Sanofi’s early, committed move into mRNA is in keeping with the push by CEO Paul Hudson to make the company a more effective R&D machine and lessen its reliance on external partners.

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