Sanofi agreed to acquire its messenger-RNA development partner Translate Bio Inc. for $3.2 billion, scooping up a biotech company steeped in the technology behind some of the world’s top-selling Covid-19 vaccines.
The French drugmaker will pay $38 in cash for each of Translate Bio’s shares, a 30% premium to Monday’s closing price. The boards of directors of both companies approved the transaction, according to a statement Tuesday.
Ordinarily a giant in the vaccines space, Sanofi is playing catch-up with Covid after upstarts BioNTech SE and Moderna Inc. raced ahead with highly effective mRNA shots that have now been injected into arms more than a billion times. Those two companies have been lavishly rewarded for their pioneering work, with Moderna’s market valuation rocketing toward $140 billion as of Monday and BioNTech’s valuation now exceeding $80 billion.
Pfizer Inc., which is partnered with Germany’s BioNTech, said last week that their Covid-19 shot could bring in $33.5 billion in revenue this year alone. “Our goal is to unlock the potential of mRNA in other strategic areas such as immunology, oncology and rare diseases in addition to vaccines,” Sanofi Chief Executive Officer Paul Hudson said in the statement.
Sanofi hasn’t brought a Covid-19 vaccine to market yet. Its leading candidate is based on the recombinant-protein technology already in use in the company’s seasonal flu shots. That product, which was subject to months of delays, is now in a late-stage trial and could be cleared by regulators by the end of this year.
But Sanofi has also been developing an mRNA Covid-19 shot with Translate Bio since March 2020. That effort grew out of a partnership between the companies, forged in 2018, to develop mRNA vaccines for as many as five infectious-disease pathogens. Their Covid-19 candidate is currently in an early-stage trial, with results expected by the end of September, and it could be approved, if all goes well, in 2022.
Translate Bio, based in Lexington, Massachusetts, also has an early-stage vaccine for influenza with Sanofi, with results expected later this year. Its pipeline of other products includes experimental therapies for cystic fibrosis and other lung ailments, along with treatments for diseases that affect the liver.
Translate Bio CEO Ronald Renaud and its largest shareholder, The Baupost Group LLC, have both signed binding commitments to support the tender offer, with their stakes and shares already held by Sanofi representing about 30% of total outstanding stock, the statement said. Sanofi expects to close the deal later this quarter.
In June, Sanofi announced plans to invest about $480 million a year in mRNA technology with a newly created “center of excellence” focused on everything from basic research to manufacturing. That initiative is aimed at speeding up the pipeline of mRNA products being developed by Sanofi and Translate Bio, along with making mRNA shots that are more stable at average temperatures and less likely to cause side effects.
Sanofi expects at least six mRNA vaccine candidates in clinical trials by 2025.