Sanofi Acquiring Bioverativ in Deal Costing $11.6 Billion

Lloyd Doyle
January 22, 2018

French healthcare group Sanofi has agreed to buy USA peer Bioverativ for $11.6 billion, in a deal which Sanofi said would boost its earnings and strengthen its presence in the field of treatment for rare diseases.

The catalyst? The biotech's stock is rising in response to the news that the French biopharma giant Sanofi (NYSE: SNY) has bought the company in all-cash deal valued at approximately $11.6 billion.

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Speaking of the competitive terrain of biotechnology industry, experts claim, while the business space has witnessed a wave of acquisition activities in recent years including the likes of Pfizer's procurement of Medivation in August 2016 for Dollars 14 billion and the purchase of Actelion by the healthcare giant Johnson & Johnson for USD 30 billion in January 2017, a majority of these agreements didn't turn out to be that fruitful in terms of ROI.

Roche's recently-approved Hemlibra looks set to become a major contender in this market in the coming years, but Sanofi says patients already on factor replacement therapies will prefer to stay on their tried-and-tested products rather than gamble on a new treatment.

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.

The purchase should also translate into a boost in profits per share beginning this year, rising to a gain of up to 5 percent in 2019, Sanofi said in a statement.


Sanofi's chief executive Olivier Brandicourt said the acquisition "enhances its presence in specialty care and leadership in rare diseases. and creates a platform for growth in other rare blood disorders".

However, some analysts questioned the cost. "Indeed, with evidence abound [ing] even now that this space is large enough for many players, we have viewed Bioverativ's growth as relatively solid and safe".

Sanofi got into rare diseases in a big way with the $20 billion acquisition of Genzyme in Boston, where it's been deeply rooted ever since.

Sanofi will invest in its consumer-health business and evaluate acquisition opportunities in the sector, Brandicourt said in November.

Following the successful completion of the tender offer, a Sanofi unit will merge with Bioverativ, and the remaining shares not tendered in the offer will be converted into the right to receive the same $105 per share in cash. One such target could be Pfizer's consumer healthcare business, they said. The French group also expects to preserve its strong credit rating.

The spate of deal-making follows a relatively subdued 2017 for biotech M&A. Guggenheim Securities and J.P. Morgan Securities LLC are acting as financial advisors to Bioverativ.

Other reports by Iphone Fresh

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