What Sanofi Is Adding to Its Portfolio With This New Acquisition

Health and Healthcare

Published: August 17, 2020 10:28 am

Principia Biopharma Inc. (NASDAQ: PRNB) shares jumped to start out the week after it was announced that it would be acquired by Sanofi (NASDAQ: SNY). The Sanofi and Principia boards of directors unanimously approved the transaction.

Under the terms of the agreement, Sanofi will acquire all outstanding shares of Principia for $100 per share in cash, which represents an aggregate equity value of about $3.68 billion.

The tender offer is expected to commence later this month, and it is subject to customary closing conditions. Sanofi plans to finance the transaction with cash on hand and it expects to complete the acquisition in the fourth quarter of 2020.

Principia’s Bruton tyrosine kinase (BTK) inhibitors add to Sanofi’s efforts to accelerate and build a portfolio of the next generation of transformative treatments for autoimmune diseases. BTK is present in the signaling pathways of key innate and adaptive cell types of the immune system. Blocking or disrupting these signaling processes can help stop inflammation and tissue destruction related to autoimmune diseases and target some of the underlying pathophysiology.

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, Principia will bring significant resources to expand and accelerate the potential benefits of these therapies.

The benefit of developing several BTK inhibitors will allow Sanofi to target specific organ systems for optimal patient benefit. The merger will provide global resources to get these novel therapies to patients faster.

Principia Bio stock traded up about 9% on Monday to $99.12, in a 52-week range of $25.35 to $99.30. The consensus price target is $100.67.

Sanofi stock was up nearly 2%, at $51.15 in a 52-week range of $37.62 to $55.00. It has a $59.00 consensus price target.

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