Published: Tue, January 23, 2018
Markets | By Noel Gibbs

Sanofi SA Will Acquire Bioverativ For $11.6 Billion In Cash (SNY)

Sanofi SA Will Acquire Bioverativ For $11.6 Billion In Cash (SNY)

This also supports Sanofi's priority of reshaping its portfolio by adding a differentiated offering of innovative therapies and providing a platform for growth in rare blood disorders, which will expand the firm's presence in specialty care, further strengthen its leadership position in rare diseases and meet the needs of the patient community.

Sanofi SA announced Monday morning it is picking up Biogen spin-out Bioverativ Inc. for $105 per share in cash, in a deal worth $11.6 billion. Some longterm observers in the market note that while key players in hemophilia like Shire and Waltham, MA-based Bioverativ face big changes ahead, this is the kind of market where physicians and patients may be slow to switch from the drugs that have long stabilized their disease.

The deal will boost Sanofi's pipeline in the growing hemophilia and orphan blood disorders market.

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Bioverativ's Eloctate and Alprolix therapies, for hemophilia A and B, respectively, brought in $847 million a year ago, and its 2018 sales are expected to hit $1.37 billion, Jefferies analysts said in a Monday note.

The acquisition should be beneficial for Sanofi as it can leverage the expertise of Bioverativ in rare blood disorder therapies, especially haemophilia. According to Ashleigh Koss, Sanofi's head of media relations for North America, this ticks those boxes and will help deliver shareholder value "by enhancing Sanofi's sustainable revenue and earnings growth". The firm offers ELOCTATE, an antihemophilic factor Fc fusion protein; and ALPROLIX, a coagulation factor IX (Recombinant) Fc fusion protein for the treatment of hemophilia A and B. It has a 25.34 P/E ratio.

Big companies are under pressure from declining sales of older treatments and many are struggling to find sufficient high-value replacements from within their own laboratories, making buying in products and know-how an attractive option.

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Sanofi is now developing its RNA-based therapy, fitusiran, for treating haemophilia.

With about $10 billion in annual hemophilia sales and 181,000 people affected worldwide, the indication represents the largest existing market for rare diseases and is forecast to grow more than 7 percent per year through 2022. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here . A deal for Bioverativ would come a year after Ariad Pharmaceuticals agreed to sell itself to Takeda Pharmaceutical Ltd. for $4.7 billion, or a roughly 75% premium to where Ariad was trading before the deal.

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