Sanofi agreed to buy the US biotech Inhibrx Inc. for as much as $2.2 billion, giving the French drugmaker a potential therapy for a genetic disorder that affects the lungs and liver.
The acquisition is the latest in a string of small- and mid-sized deals as Sanofi looks to double down on innovative medicines and reduce its reliance on the blockbuster asthma medicine Dupixent.
Inhibrx shareholders will get $30 per share as part of the deal, along with the right to receive $5 in cash if the experimental drug meets a regulatory milestone. Inhibrx’s founder and chief executive officer, Mark Lappe, will run a spinoff with the rest of the research and the employees that Sanofi will help capitalize, the companies said in a statement.
Sanofi CEO Paul Hudson has heralded a new era of cutting-edge research and development at the company, emulating rivals like Novartis AG and Roche Holding AG. His plan includes raising Sanofi’s drug-development spending in coming years, a goal that required abandoning old profit targets and angered some shareholders.
The company’s stock price was jolted last October by a profit warning that wiped out about $25 billion in market value. The shares have rallied since. They were little changed in early trading Tuesday in Paris, declining 0.4%.
Hudson argues that Sanofi’s pipeline of experimental medicines is now so promising — along with the company’s resources to add to it with deals like this one — that ratcheting up spending will create more value over the long-term.
With the Inhibrx deal, Sanofi is acquiring all the assets and liabilities associated with the experimental drug INBRX-101, a therapy for treating patients with alpha-1 antitrypsin deficiency. People with the genetic disorder produce low levels of a protein that helps protect the lungs, raising the risk of damage from smoking, pollution and dust.
‘Enhanced Potential’
Sanofi expects to fund the transaction with available cash resources. The deal comes as the firm snaps up promising assets in the cancer, gene therapy and rare-disease fields, amid a renewed rush for deals in the biotech space.
La Jolla, California-based Inhibrx’s lead therapy was granted fast-track review last May and attempts to treat the most common genetic cause of liver disease in children.
“The acquisition of the product by Sanofi provides an external validation of the product, and enhances the commercial potential of the drug due to Sanofi’s existing leadership in blood disorders,” Thibault Boutherin and colleagues at Morgan Stanley wrote in a note.
Sanofi’s best-seller Dupixent has shown promising trial results in a lung condition called chronic obstructive pulmonary disease, or COPD, one of the conditions that can affect people with alpha-1 antitrypsin deficiency.
The company has said its plans to raise spending on research and development will lead to a 50% increase in the number of late-stage clinical trials in 2024 and 2025.
New products Sanofi is working on include Altuviiio for hemophilia and Tzield for type-1 diabetes. The company’s more promising experimental medicines include amlitelimab for treating atopic dermatitis, a chronic skin condition, and frexalimab to target, among other things, multiple sclerosis.