Sanofi CEO Paul Hudson has been preparing for months to lay out his new strategy for the French drugmaker, with the big unveiling set for Tuesday. But Monday, it announced a cancer buyout—and that deal may give some clues about Hudson's plans for the future.
Sanofi on Tuesday laid out $2.5 billion for Synthorx, an immuno-oncology biotech with an IL-2 drug in trials for multiple cancer types and combination regimens. While the buyout will obviously beef up Sanofi's lagging oncology pipeline, ODDO BHF analysts figure it gives an “indication of management’s message” ahead of tomorrow’s investor confab.
The analysts expect Hudson's Sanofi to emphasize oncology, with more deals on tap to "complete a weak product portfolio in this therapeutic area.” At the event tomorrow, they expect Hudson and other execs to detail the company's competitive positioning, talk up pipeline goals and outline spending priorities—including on forthcoming China launches.
Since Hudson joined Sanofi in September from Novartis, he's toured the company’s far-flung facilities to learn about its operations and evaluate its previous strategies. Tuesday's capital markets day will show the fruits of that labor.
In pulling off a biotech buyout now, Hudson extends former CEO Olivier Brandicourt's deal series, albeit in cancer rather than Brandicourt's rare disease focus. At the beginning of 2018, Brandicourt picked up hemophilia-focused Bioverativ and nanobody biotech Ablynx, which later scored an FDA nod for Cablivi to treat a rare blood-clotting disorder.
The Bioverativ buy has run into some challenges as Roche’s Hemlibra is proving to be a tough competitor in that field; Sanofi took a $2 billion write-down due to those challenges.
The dealmaking—and a variety of operational changes, including Hudson's arrival—come amid a yearslong pricing squeeze for Sanofi in its once-dominant diabetes and cardiovascular outfits. Last month, reports surfaced that Sanofi is considering exiting consumer healthcare, a unit that pulled in $5 billion in 2018. A spokesperson said that "all of our businesses are undergoing thorough reviews."
On its latest acquisition, Sanofi said Synthorx’s platform is “synergistic” with its own medicines. Sanofi aims to explore the biotech’s offerings in combination with its cancer meds such as Libtayo and isatuximab, ODDO BHF analysts wrote.