Sanofi to Purchase U.S.-Based Principia Biopharma for $3.68 Billion

UTC by Godfrey Benjamin · 3 min read
Sanofi to Purchase U.S.-Based Principia Biopharma for $3.68 Billion
Christopher A. Viehbacher, CEO of Sanofi. Photo: World Economic Forum / Flickr

Sanofi will acquire all of the outstanding shares of Principia biopharma for $100 per share in cash, a price that represents an aggregate equity value of approximately $3.68 billion on a completely diluted basis.

Following months of interest, French healthcare giant Sanofi SA (NASDAQ: SNY) is set to purchase U.S.-based company Principia Biopharma Inc (NASDAQ: PRNB). At a time when the attention of the whole world is shifted to COVID-19 and the discovery of a working vaccine, little is mentioned about pharmaceutical companies working on other life-saving therapies.

The announcement from Sanofi and Principia Biopharma has shifted the focus as the acquisition will seek to bolster the Research and Development of autoimmune and allergic diseases of interest.

“This acquisition advances our ongoing R&D transformation to accelerate the development of the most promising medicines that will address significant patient needs,” said Paul Hudson, Sanofi Chief Executive Officer. “The addition of multiple BTK inhibitors to our pipeline demonstrates our commitment to strategic product acquisitions in our priority therapeutic areas. Full ownership of our brain-penetrant BTK inhibitor ‘168 removes complexities for this priority development program and simplifies future commercialization.”

The acquisition will see Sanofi acquire all of the outstanding shares of Principia for $100 per share in cash, a price that represents an aggregate equity value of approximately $3.68 billion on a completely diluted basis. The boards of both companies have reportedly agreed to these terms

Progressive as the deal comes off, the shares of both companies have taken a bullish response as the news broke out. Principia Biopharma rose by 11.31% in the pre-market trading hours to hit a record of $101. The French-based Sanofi (SAN) also saw a 0.54% uptick as at press time.

Sanofi and Principia Business Alignment

For any Merger and Acquisition proposal to pull through, both businesses irrespective of the side of the deal they are on must have a complementary business offering. In the case of Sanofi and Principia, this is the case.

While Principia Biopharma is a late-stage biopharmaceutical company dedicated to bringing transformative therapies to patients with significant unmet medical needs in immune-mediated diseases, Sanofi is dedicated to preventing illnesses with vaccines, provide innovative treatments to fight pain and ease suffering. Sanofi has a mantra to stand by the few who suffer from rare diseases and the millions with long-term chronic conditions.

When this acquisition is brought into full focus, the therapeutics drug being developed by Principia will help Sanofi fulfill its mission of bringing medical-related. succor to people around the world. One of these is the Bruton tyrosine kinase (BTK) inhibitors, and the drug will add to Sanofi’s efforts to accelerate and build a portfolio of the next generation of transformative treatments for autoimmune diseases.

Principia Biopharma President and CEO Martin Babler stated:

“Principia’s successful design and development of a whole portfolio of BTK inhibitors for immunology is aimed to transform the treatment for patients with immune-mediated diseases. By combining with Sanofi, we will bring significant resources to expand and accelerate the potential benefits of these therapies. The benefit of developing several BTK inhibitors will allow us to target specific organ systems for optimal patient benefit. The merger will provide global resources to get these novel therapies to patients faster.”

Which re-emphasizes the overall positive potential of the acquisition. With all things being equal, Sanofi (SAN) aims to finance the deal with cash on hand and expects the acquisition to be finalized by the 4th quarter of 2020.

Meanwhile, today in the pre-market the stock of Principia Biopharma is almost 10% up, at $99.80. Sanofi stock is 0.70% up, at $50.68. Both stocks were down at teh previous close.

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