French pharmaceutical company, Sanofi SA, announced its plans to buy Bioverativ Inc. spin-off of biotech company, Biogen Inc. The deal will see the Paris-based giant add hemophilia treatments to compensate for its under-performing diabetes treatments.
Sanofi’s bid values Bioveratic Inc at $105 a share, a 64 percent premium to the drugmaker’s closing price last Friday.
“With Bioverativ, a leader in the growing hemophilia market, Sanofi enhances its presence in the specialty care and leadership in rare diseases…” said Olivier Brandicourt, Sanofi’s CEO in a statement.
According to the company, sales of treatments for hemophilia are valued at an estimated $10 billion per year which will gradually rise 7 percent yearly up until 2022.
Sanofi shares were reported on Monday morning at 2.69 percent with €70.99 per share. Bioverativ’s market value rose to 62 percent in pre-market trading to $103.75. Bioverativ was spun off from biotech company, Biogen Inc. last year.
The pharmaceutical giant has scoured the market for potential biotech deals for more than two years in an attempt to offset declining sales and profits from its best-selling insulin Lantus.
Lantus was knocked out of the market by competitors with cheaper insulin substitutes or diabetes drugs, a feat which was coupled by US regulators applying more pressure on drug prices.
The deal will allow Sanofi to take full advantage of Bioverativ’s hemophilia doctors and patients as it is currently working on an experimental hemophilia therapy called fiturisan.
More so, the deal is Sanofi’s biggest endeavor in seven years, since its 2011 acquisition of Genzyme Corp. for approximately $20.1 billion.
Bioverativ Inc. (Spin-off of Biotech Company, Biogen Inc) Revenue
Bioverativ Inc. (spin-off of biotech company, Biogen Inc) saw its revenue increased by 27 percent in the third quarter. The company’s two main drugs, Eloctate and Alprolix, which target two of the most common types of hemophilia, gained $847 in sales in 2016.
Sanofi estimates that Bioverativ will help add as much as 5 percent to the company’s earnings next year.
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