Sanofi plans to acquire Bioverativ for approximately $11.6 billion, in a deal that the companies said would expand the buyer’s portfolio in specialty care and strengthen the rare disease presence it established seven years ago.

Headquartered in Waltham, MA, Bioverativ focuses on developing therapies for hemophilia and other rare blood disorders and was created last year when Biogen spun out its global hemophilia business. 

Bioverativ generated $847 million in sales and $41 million in royalties in 2016 from marketed drugs that include the extended half-life therapies Eloctate® [Antihemophilic Factor VIII (Recombinant), Fc Fusion Protein] and Alprolix® [Coagulation Factor IX (Recombinant), Fc Fusion Protein] for hemophilia A and B.

Bioverativ markets the two products in the U.S., Japan, Canada, and Australia, and plans to expand elsewhere in the world, the companies said. The therapies are also commercialized in the E.U. and other countries under a collaboration agreement.

Sanofi said its deal was driven by its belief that factor replacement therapy will remain the standard of care in hemophilia for many years, due to its safety and long-acting profile.  Sanofi said it will leverage Bioverativ's clinical expertise and existing commercial platform to advance fitusiran, an investigational RNA interference (RNAi) therapeutic for hemophilia A and B, with or without inhibitors.

On January 8, Sanofi obtained global development and commercialization rights to fitusiran through a restructuring of its rare disease alliance with Alnylam Pharmaceuticals, under which Alnylam obtained global development and commercialization rights to its investigational RNAi therapeutics programs for ATTR amyloidosis, including patisiran and ALN-TTRsc02. The companies entered into their alliance in 2014, with Sanofi at the time taking a 12% stake in Alnylam.

Beyond its two marketed products, Bioverativ's pipeline includes a program in Phase III testing for cold agglutinin disease and early-stage research programs and collaborations in hemophilia and other rare blood disorders, including sickle cell disease and beta thalassemia.

Looking Beyond Genzyme

Sanofi aims to strengthen a presence in rare disease therapeutics that it has anchored until now on its 2011 acquisition of Genzyme for $20.1 billion.

Sanofi said it plans to advance Bioverativ’s pipeline candidates faster through its R&D organization, and help the acquired company more fully capitalize on opportunities for current and future products through its global presence, expertise, and success in launching specialty medicines.

The acquisition is expected to be immediately accretive to Sanofi's Business earnings per share (EPS) in FY2018 and up to 5% accretive in FY2019. Sanofi is also projected to achieve return on invested capital (ROIC) in excess of cost of capital within three years

Sanofi said it plans to finance the transaction with a combination of cash on hand and through new debt to be raised. 

Under terms of their merger agreement, Sanofi plans to commence a tender offer to acquire all outstanding shares of Bioverativ common stock at $105 per share in cash—a 64% premium to Bioverativ's closing price on January 19, 2018, when speculation first emerged about a possible acquisition by Sanofi.

The offer is subject to various conditions, including the tender of at least a majority of the outstanding Bioverativ shares, redelivery of a tax opinion delivered at signing, the expiration or termination of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act, other regulatory approvals, and other customary conditions. 

Subject to the satisfaction or waiver of customary closing conditions, Sanofi and Bioverativ said, the deal is expected to close within three months. Once that happens, a wholly owned subsidiary of Sanofi will merge with Bioverativ.

The tender offer is expected to commence in February. Following successful completion of the offer, outstanding Bioverativ shares not tendered in the tender offer will be converted into the right to receive the same $105 per share in cash paid in the tender offer.

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