Translate Bio CEO Ronald C. Renaud Jr. discusses his company, its mRNA platform, and its partnership with Sanofi in COVID-19 and other diseases as a guest in September 2020 on “GEN Live,” GEN’s monthly live-streaming video discussion series.

Sanofi is acquiring its COVID-19 vaccine collaboration partner Translate Bio for approximately $3.2 billion, the companies said today, in a deal that addresses the buyer’s desire to advance mRNA vaccine technology beyond the candidates it is co-developing for protection from SARS-CoV-2 and seasonal influenza.

Headquartered in Lexington, MA, Translate Bio is partnering with Sanofi in developing MRT5500, an mRNA vaccine based on Translate’s proprietary MRT™ platform, which it acquired from Shire in 2017. The companies began partnering in COVID-19 in March 2020 and earlier this year launched a Phase I/II trial of MRT5500, for which interim results are expected in the third quarter.

In June, the companies launched a Phase I trial evaluating two formulations of an mRNA vaccine (MRT5400 and MRT5401) designed to protect against seasonal influenza, with initial results anticipated during the fourth quarter. The two formulations differ in the lipid nanoparticle (LNP) that contains the mRNA.

Furthest along in Translate Bio’s solo pipeline is MRT5005, an mRNA vaccine designed to treat cystic fibrosis that is now in a first-in-human Phase I/II trial (NCT03375047).

“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 CEO Paul Hudson said in a statement.

“Translate Bio adds an mRNA technology platform and strong capabilities to our research, further advancing our ability to explore the promise of this technology to develop both best-in-class vaccines and therapeutics,” Hudson added. “A fully owned platform allows us to develop additional opportunities in the fast-evolving mRNA space. We will also be able to accelerate our existing partnered programs already under development.”

Investors welcomed the prospect of a Sanofi acquisition, touching off a buying spree last night that sent shares of Translate Bio up about 73%, to $50.35 as of 7:59 p.m. ET, from yesterday’s close of $29.15, after Reuters reported that Sanofi had offered to buy the company, citing unnamed sources. Translate’s stock price fell back to $37.60 as of 1:29 p.m.—29% above yesterday’s close.

Given the early stage of TBIO’s platform, and the company’s recent pivot into vaccines, the deal terms strike us as favorable for SNY and fair for TBIO,” Geoffrey C. Porges, MBBS, director of Therapeutics Research and a senior research analyst at SVB Leerink, wrote today. “Despite the lofty valuations for mRNA platforms today, and their now-proven value for vaccine development, it is hard for us to see how TBIO could have attracted another buyer, given the companies’ entrenched partnership.”

Collaboration grows to $2.3B

Sanofi and Translate Bio began partnering on mRNA vaccines in 2018, launching an up-to-$805 million-plus collaboration in June 2018.

Last year, Sanofi and Translate Bio expanded their collaboration to develop mRNA vaccines for infectious diseases, with the pharma giant nearly tripling to more than $2.3 billion its potential payout to Translate, and the companies increasing from five to seven the maximum number they plan to develop under that partnership.

“We generated immunogenicity data, neutralization data for a number of infectious disease targets, both form the viral and the bacterial side. The productivity of that relationship was just a very natural foundation for when we decided to start working together on COVID-19,” Translate Bio CEO Ronald C. Renaud Jr. said September 16 as a guest on “GEN Live”, GEN’s monthly live-streaming video discussion series.

“For us and Sanofi to extend this collaboration first into COVID-19 and then beyond that into a much more expanded collaboration was just a very natural transition and natural extension of the work that was already ongoing between our two organizations,” Renaud added.

Porges asserted that acquiring Translate was, strategically speaking, a sensible fit for Sanofi given Sanofi’s recent commitment to mRNA and mRNA vaccine development.

Sanofi bolstered its mRNA capabilities in April when it acquired Tidal Therapeutics for $160 million upfront plus up to $310 million tied to achieving milestones. Privately-owned Tidal had developed an mRNA-based tech platform for in vivo reprogramming of immune cells inside the body, allowing for an off-the-shelf approach to developing CAR-T therapies. The platform uses proprietary nanoparticles to deliver mRNA selectively, with initial applications targeting specific types of immune cells.

The technology’s in vivo approach is designed to provide similar efficacy to current ex vivo approaches where immune cells are genetically modified to enhance their therapeutic properties (such as chimeric antigen receptor CAR-expressing T-cells), with the potential for improved safety, outpatient dosing, and repeat dosing. The platform, Sanofi concluded, offered potential to expand its research capabilities in both immuno-oncology and inflammatory diseases, as well as applicability to other disease areas as well.

On June 29, Sanofi announced plans to launch an mRNA Center of Excellence with approximately €400 million ($474 million) a year in funding. That Center is intended to accelerate the development and delivery of next-generation vaccines by joining approximately 400 employees together with end-to-end mRNA vaccine capabilities that include dedicated R&D, digital, and chemistry, manufacturing and controls (CMC) teams across sites at Cambridge, MA and Marcy l’Etoile, Lyon, France.

Delay, success with GSK

Sanofi’s embrace of mRNA came after its other key COVID-19 therapeutic effort suffered a clinical setback before finding success. Sanofi has partnered with GlaxoSmithKline to develop another COVID-19 vaccine, one that incorporates Sanofi’s S-protein COVID-19 antigen, based on recombinant DNA technology; and GSK’s pandemic AS03 adjuvant.

The companies were delayed in developing their vaccine in December, after Phase I/II interim results showed that the vaccine generated insufficient neutralizing antibody titers in adults over the age of 50, “likely due to an insufficient concentration of the antigen,” according to a statement. Volunteers were accidentally given lower doses than intended in initial clinical trials due to a miscalculation in the manufacturing process, Thomas Triomphe, Sanofi’s executive vice president for vaccines, told The Wall Street Journal.

But on May 27, Sanofi and GSK began enrollment in a 35,000-volunteer Phase III trial after generating positive results in a Phase II study (VAT00002; NCT04762680) showing 95% to 100% seroconversion following a second injection in all age groups (18–95 years old) and across all doses, with acceptable tolerability and with no safety concerns.

In announcing the Center of Excellence a month later, Sanofi said it is expected at minimum to generate six clinical candidates by 2025.

Those candidates are now expected to incorporate Translate Bio’s MRT platform, through which the company creates mRNA that encodes functional proteins, and encapsulates the mRNA in an LNP. When that mRNA is delivered to the target cell, the cell’s own machinery recognizes it and translates it, restoring or augmenting protein function to treat or prevent disease.

Translate’s most advanced MRT-based candidate, MRT5005 in cystic fibrosis, generated positive results in March from a second interim analysis of Phase I/II data suggesting that repeat dosing of MRT5005 was generally safe and well tolerated.

MRT5005 is designed to address the underlying cause of CF regardless of genetic mutation by delivering mRNA encoding fully functional cystic fibrosis transmembrane conductance regulator (CFTR) protein to cells in the lung through nebulization.

Also in Translate’s solo pipeline are discovery-phase candidates—another cystic fibrosis prospect, and candidates for primary ciliary dyskinesia (PCD), pulmonary arterial hypertension (PAH), and undisclosed liver diseases. The company and Sanofi reason that the MRT platform may be applied to various classes of treatments, such as therapeutic antibodies or vaccines in areas such as oncology.

“Significant Progress”

“The talented and dedicated Translate Bio team has built the foundation of a strong mRNA platform,” Renaud stated in the companies’ announcement. “Our expertise coupled with that of Sanofi has driven significant progress under the collaboration thus far, and we believe that this acquisition will strengthen the team’s ability to achieve the full potential of the mRNA technology.”

Renaud and Translate Bio’s largest shareholder—The Baupost Group, a Boston-based investment manager that manages about $28 billion in assets—have signed binding commitments to support the tender offer that Sanofi plans to commence later this month to acquire all outstanding shares of Translate Bio common stock for $38 per share cash—a premium of 56% to Translate Bio’s volume-weighted average price per share over the past 60 days.

Following a successful completion of the tender offer, a wholly owned subsidiary of Sanofi will merge with Translate Bio, while any outstanding Translate Bio shares not already owned by Sanofi or its affiliates that are not tendered in the tender offer will be converted into the right to receive the same $38 per share in cash paid in the tender offer.

The binding commitments, combined with the Translate Bio shares already owned by Sanofi or its affiliates, represent a total of approximately 30% of Translate Bio’s total shares outstanding.

“We do not expect another bidder to emerge for TBIO given the more or less exclusive collaboration TBIO already has with SNY for infectious disease vaccine development, nor do we expect significant antitrust delays given that pre-existing collaboration to develop joint vaccines,” Porges wrote.

Sanofi said it expected to complete the acquisition in the third quarter, subject to the satisfaction or waiver of customary closing conditions.

Sanofi plans to fund its acquisition of Translate Bio with available cash. The company recorded a hefty €9.722 billion ($11.5 billion) in cash and cash equivalents as of June 30, according to its balance sheet released with its second-quarter results.

“Sanofi and Translate Bio have a shared commitment to innovation in the mRNA space,” Renaud added. “With Sanofi’s long-standing expertise in developing and commercializing vaccines and other innovative medicines on a global scale, Translate Bio’s mRNA technology is now even better positioned to reach more people, faster.”

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