Sanofi to Acquire Inhibrx for Up to $2.2B, with AATD Candidate in Mind

Sanofi has agreed to acquire Inhibrx for up to approximately $2.2 billion, the companies said today, in a deal designed to expand the buyer’s pipeline in rare diseases as well as immunology and inflammation.

Sanofi will acquire Inhibrx’s lead pipeline candidate INBRX-101, while spinning out the rest of Inhibrx’s pipeline—three cancer candidates, of which one is in the clinic.

INBRX-101 is a mid-clinical-phase recombinant human AAT-Fc fusion protein therapeutic being developed to treat Alpha-1 Antitrypsin Deficiency (AATD). INBRX-101 is designed to help patients reduce inflammation and prevent further deterioration of lung function by achieving normalization of serum AAT levels with monthly dosing vs. the weekly dosing required by AAT augmentation therapy, to date the only specific therapy for AATD.

In its most recent investor presentation, Inhibrx projected the market for AATD treatments was “growing at ~15% annually and projected to grow to $4B due to increased diagnosis,” based on interviews with key opinion leaders and a pair of studies published in 2016 and in 2021.

INBRX-101 has successfully completed a Phase I trial (NCT03815396), from which Inhibrx reported positive safety and pharmacokinetics results. Inhibrx is now enrolling patients in a Phase II trial (NCT05856331)  designed to further assess the potential of INBRX-101 as a treatment for AATD.

“The addition of INBRX-101 as a high potential asset to our rare disease portfolio reinforces our strategy to commit to differentiated and potential best-in-class products,” Houman Ashrafian, Sanofi’s head of research and development, said in a statement. “With our expertise in rare diseases and growing presence in immune-mediated respiratory conditions, INBRX-101 will complement our approach to deploy R&D efforts in key areas of focus and address the needs of the underserved AATD patients and communities.”

The rest of Inhibrx’s pipeline is led by INBRX-109—a precisely engineered tetravalent sdAb-based therapeutic candidate designed to agonize death receptor 5 (DR5) in order to induce tumor selective programmed cell death.

INBRX-109 is in a Phase I trial (NCT03715933) in patients with locally advanced or metastatic solid tumors including sarcomas, with an estimated primary completion date of August; as well as the Phase II ChonDRAgon registrational trial (NCT04950075) in patients with unresectable or metastatic conventional chondrosarcoma, with an estimated primary completion date of June.

Also in Inhibrx’s pipeline are two preclinical candidates. One is INBRX-105, a tetravalent sdAb-based therapeutic candidate currently being evaluated in patients with programmed death ligand 1 (PD-L1) expressing tumors, including those refractory to, or relapsed from, approved checkpoint inhibitor therapies. The other is INBRX-106, a hexavalent sdAb-based therapeutic candidate targeting OX40 currently being evaluated in patients with locally advanced or metastatic solid tumors.

Spinning out

INBRX-109, -105, and -106 will be spun out into an entity now called New Inhibrx, along with Inhibrx’s employees. Headquartered in La Jolla, CA, the company reported 141 employees as of December 31, 2022, according to its most recent accounting of its workforce, its Form 10-K annual report for 2022.

Mark P. Lappe, the founder and CEO of the current Inhibrx, will serve as chairman and CEO of New Inhibrx, which will continue to operate under the Inhibrx name. Sanofi will retain an 8% equity stake in New Inhibrx.

“The acquisition of AAT is logical and consistent w/ our research thesis and BUY rating, tho we expect investors will see the oncology NewCo mostly as a wait-and-see,” Jefferies analyst Michael D. Yee wrote today in a research note.

Investors largely agreed with that wait-and-see analysis, explaining why Inhibrx shares hardly budged the way shares of most acquired companies jump following a buyout deal. Inhibrx shares rose only 7% in late morning trading today, from $33.33 at yesterday’s close to $35.69 as of 10:52 a.m. ET. Sanofi shares dipped nearly 2% in trading on Euronext Paris, from €94.20 ($102.04) to €92.37 ($100.06) as of 10:37 a.m. ET.

Sanofi has agreed to acquire all outstanding shares of Inhibrx for $30 per share in cash, representing an equity value of approximately $1.7 billion—plus up to approximately $296 million that Inhibrx’s shareholders will receive tied to achieving an unspecified regulatory milestone, in the form of a non-transferable contingent value right (CVR) per Inhibrx share. The CVR entitles shareholders to receive a deferred cash payment of $5 per share.

Yee noted that the CVR hinges on final approval of INBRX-101 by June 2027, including accelerated approval, regardless of any obligation to conduct any post-marketing or confirmatory study.

“The fact SNY is acquiring AAT and willing to handle anything regarding full approval is quite bullish,” Yee added.

Sanofi also agreed to satisfy Inhibrx’s currently outstanding third-party debt, and pay Inhibrx’s shareholders 0.25 shares of New Inhibrx stock for each share of current Inhibrx share that they own. New Inhibrx will initially be capitalized with $200 million cash, bringing the deal value to about $2.2 billion.

The boards of Sanofi and Inhibrx have approved the acquisition deal, which is expected to close during the second quarter subject to completion of the New Inhibrx spin-off transaction and other customary closing conditions.

Sanofi said it expects to finance the acquisition of Inhibrx with available cash resources.

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