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Bioverativ deal is valued at 64% premium to Friday’s close
French drugmaker seeks growth drivers to offset diabetes drop
Sanofi SA agreed to buy Bioverativ Inc., a spinoff from biotech giant Biogen Inc., for about $11.6 billion in a bid by France’s biggest drugmaker to gain treatments for rare blood disorders.
Sanofi is the second diabetes heavyweight this year to seek a takeover to bulk up in blood disorders, a field that hasn’t suffered from a recent clampdown on prices. Danish drugmaker Novo Nordisk A/S this month made its largest takeover offer ever with an unsolicited 2.6 billion-euro ($3.2 billion) bid for Belgium’s Ablynx NV, which developed a potential blockbuster for a rare blood clotting disease.
Bioverativ will give Sanofi access to hemophilia doctors and patients as it pushes forward with fitusiran, the experimental hemophilia therapy for which it acquired global rights this month.
The headwinds in diabetes could weigh on Sanofi’s profits this year, according to Bloomberg Intelligence analysts Sam Fazeli and Michael Shah.
Acquisitions are critical, and the agreed deal is a “step in the right direction” for the French drugmaker, Fazeli and Shah wrote in a note Monday. The transaction will also help Sanofi compete in the $10 billion global market for treating blood disorders with a new product from Roche Holding AG winning approval from U.S. regulators last year.
Sanofi will invest in its consumer-health business and evaluate acquisition opportunities in the sector, Brandicourt said in November.
Revenue for Waltham, Massachusetts-based Bioverativ increased 27 percent in the third quarter. Its main drugs, Eloctate and Alprolix, treat the two most common types of hemophilia and in 2016 brought in $847 million in sales, according to filings.
Bioverativ’s share price has soared 31 percent from an eight-month low in November, closing Friday at an all-time high of $64.11. Bioverativ last year was spun off from biotech giant Biogen Inc. Sanofi, meanwhile, is trading near the lowest level in more than a year after dropping 6.6 percent in 2017.
The deal would be the latest amid a wave of consolidation in the industry. Announced acquisitions of health-care companies globally reached $354 billion last year, 28 percent more than the $277 billion of deals announced in 2016, according to data compiled by Bloomberg. The list includes Johnson & Johnson’s $30 billion purchase of Swiss biotech Actelion and Gilead Sciences Inc.’s $11.9 billion takeover of Kite Pharma Inc.
Analysts expect the trend to accelerate this year, spurred in part by the U.S. tax overhaul.
For Sanofi, the acquisition is the largest since its 2011 purchase of Genzyme Corp. for about $20.1 billion, under former CEO Chris Viehbacher. Brandicourt, who took over in 2015, failed in a hostile bid for Medivation in 2016 and then lost out to Johnson & Johnson in the bidding for Actelion. Sanofi last year also swapped its Merial animal-health business, valued at 11.4 billion euros, for Boehringer Ingelheim GmbH’s 6.7 billion-euro consumer-health operation. Boehringer also paid Sanofi 4.7 billion euros in cash.
Buying Bioverativ will immediately add to Sanofi’s earnings per share this year, and will add as much as 5 percent next year, the company said.
Lazard advised Sanofi, while bankers from Guggenheim Securities and J.P. Morgan Securities LLC worked for Bioverativ. Weil, Gotshal & Manges LLP is Sanofi’s legal counsel and Paul, Weiss, Rifkind, Wharton & Garrison LLP is legal counsel to Bioverativ.