Sanofi snaps up Biogen's spun-out Bioverativ in $11.6B deal

Sanofi Pasteur HQ
Sanofi has been shopping for a deal up to $20 billion, and after falling short in bids for Medivation and Actelion, has sewn up a Bioverativ buyout. (Sanofi/Vincent Moncorgé)

Sanofi has finally scored a deal. The French pharma said Monday it would shell out $11.6 billion for Bioverativ, the hemophilia-focused drugmaker spun off by Biogen just last year.

It's Sanofi's biggest deal since it bought Genzyme back in 2011, and it comes after the company tried and failed to win Medivation—bought in 2016 by Pfizer for a whopping $14 billion—and Actelion, which sold later the same year to Johnson & Johnson in a $30 billion deal. The $105-per-share price for Bioverativ isn't cheap, either, particularly with gene therapy competition looming in hemophilia, analysts say. But similar questions arose about the Genzyme purchase, and that deal has since proven to be Sanofi's chief growth engine.

The Bioverativ acquisition will bolster Sanofi's rare disease business by adding a duo of hemophilia treatments to its roster and a suite of experimental therapies to its pipeline, including treatments for other rare blood disorders; it should also help advance Sanofi's own experimental RNAi hemophilia therapy, fitusiran.

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Sanofi can use the added cash flow: Its cash-cow diabetes business is suffering on pricing pressure from payers and competition from new brands and biosimilars. The company says Bioverativ will boost earnings beginning this year and deliver a 5% increase in 2019.

Bioverativ's Eloctate and Alprolix therapies, for hemophilia A and B, respectively, brought in $847 million last year, and its 2018 sales are expected to hit $1.37 billion, Jefferies analysts said in a Monday note.

RELATED: Bioverativ remind you of Baxalta? Get ready for a different M&A outcome, execs say

The Bioverativ buy in some respects mirrors Shire's buyout of Baxalta, the hemophilia-focused drugmaker spun off by Baxter in July 2015. Shire made an early run at Baxalta—barely a month after the Baxter spinoff—but was unable to persuade shareholders to accept the buyout until 2016.

Ahead of their own spinoff last year, Bioverativ executives said they weren't looking to follow in Baxalta's footsteps. “[T]he idea of setting up a company to be sold is not a strategy, and that certainly is not our strategy,” CEO John Cox told FiercePharma at the 2017 J.P. Morgan Healthcare Conference.

Instead, Bioverativ intended to do its own dealmaking, including setting up development partnerships with smaller companies, and it already delivered one sizable deal, a $424 million-plus R&D partnership with U.K. biotech Bicycle Therapeutics.

Now, though, Cox says Sanofi's multinational reach can help push Bioverativ's products to more patients around the world. "Sanofi brings proven capabilities and a global infrastructure, which we believe will help to more rapidly expand access to our medicines globally," Cox said in Monday's statement.

At the time of the spinoff, Bioverativ's leadership believed the transaction would create "meaningful value" for shareholders, and the Sanofi buyout does exactly that, he added.

Perhaps too much value for those shareholders, analysts at Jefferies said in a Monday note. They called the deal "relatively expensive" at 8.4 times 2018 revenue, and noted that analysts in general expect "limited growth" for Bioverativ in the mid-term. Still, the buyout is "logical in terms of building around Sanofi’s presence and pipeline in rare diseases and hemophilia, though management may have to argue against concerns on competition, in our view."