Sanofi (NYSE:SNY) announced today that it agreed to acquire all outstanding shares of Principia Biopharma (NSDQ:PRNB) in a deal worth approximately $3.68 billion.
The deal sets all outstanding shares of Principia at $100 per share, which will be acquired in cash. Sanofi and Principia both received unanimous approval from their respective boards of directors, according to a news release.
San Francisco-based Principia develops Bruton tyrosine kinase (BTK) inhibitors that are present in the signaling pathways of key innate and adaptive cell types in the immune system. Blocking or disrupting the signaling processes associated with BTK inhibitors can help in stopping inflammation and tissue destruction related to autoimmune diseases, while also targeting underlying pathophysiology.
Principia’s BTK inhibitor franchise is based on its proprietary Tailored Covalency platform designed to allow both reversible covalent and irreversible covalent small molecule inhibitors that are more selective with less off-target effects, offering a potentially stronger safety profile while delivering the desired efficacy, the company said.
Sanofi and Principia have worked together before, having entered into a collaboration in 2017 in which Principia granted Sanofi an exclusive, worldwide license to develop and commercialize BTK inhibitor ‘168, which has been targeted for use in treating multiple sclerosis and other central nervous system diseases.
“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” Sanofi CEO Paul Hudson said in the news release. “The addition of multiple BTK inhibitors to our pipeline demonstrates our commitment to strategic product acquisitions in our priority therapeutic areas. Full ownership of our brain-penetrant BTK inhibitor ‘168 removes complexities for this priority development program and simplifies future commercialization.”
“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,” added Principia Biopharma president & CEO Martin Babler. “By combining with Sanofi, we will bring significant resources to expand and accelerate the potential benefits of these therapies. The benefit of developing several BTK inhibitors will allow us to target specific organ systems for optimal patient benefit. The merger will provide global resources to get these novel therapies to patients faster.”
Following the completion of the tender offer in the acquisition, an unnamed wholly-owned subsidiary of Sanofi is set to merge with Principia, while the outstanding shares not tendered in the offer will be converted into the right to receive the same $100 per share in cash. The companies expect the tender offer to commence later this month, while Sanofi plans to finance the transaction with cash on hand. The acquisition is slated to be completed in the fourth quarter of 2020.
Evercore is acting as financial advisor to Sanofi, while Weil, Gotshal & Manges LLP is acting as its legal counsel. Centerview Partners LLC and BofA Securities are acting as financial advisors to Principia, while Cooley LLP is acting as its legal counsel.
Shares of PRNB shot up 9.3% at $99.14 per share in midday trading today. SNY shares were up 1.8% at $51.25 at the same time.
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