Sanofi throws down $2.9B to acquire diabetes partner Provention Bio

After Sanofi lost the bidding war for Horizon Therapeutics in December, the question wasn’t so much if the French pharma would pursue another buyout, but when. Now, rather than making another go at rare diseases, Sanofi is doubling down on one of its long-held areas of expertise: diabetes.

Sanofi will pay $25 per share in cash—or about $2.9 billion in total—for Provention Bio, the companies said in a joint press release Monday. The deal is expected to close in the second quarter of 2023.

The deal gives Sanofi access to Provention’s approved immunotherapy Tzield, greenlighted in November, which is designed to stall progression of type 1 diabetes.

Ahead of last year’s approval, Provention wrangled Sanofi as its partner for a “co-promotional” pact around the drug’s U.S. launch. As part of that deal, Sanofi threw down $20 million to secure early negotiating rights for potential launches outside of the U.S.

The agreement to acquire Provention outright, meanwhile, “builds” on that previous promotional pact and leverages Sanofi’s established expertise in diabetes, the French pharma said in a statement.

Sanofi’s presence in the disease is largely confined to insulins, putting the company on the backfoot compared to its rivals Eli Lilly and Novo Nordisk, which have been plowing ahead with novel GLP-1 medicines like Mounjaro and Ozempic, respectively.

In fact, backing away from diabetes R&D was a key part of an aggressive plan to refocus Sanofi that then-new CEO Paul Hudson rolled out in 2019. The goal at the time was to prioritize the company's strongest growth products, like immunology star Dupixent and vaccines, while exiting underperforming businesses. 

As part of the move, Sanofi in 2019 said it would exit R&D in diabetes and cardiovascular groups and axed the launch of efpeglenatide, a GLP-1 injection for Type 2 diabetes. 

But with its Provention buy, Sanofi is poised for a “partial return” to the field, ODDO BHF analysts wrote in a note to clients Monday.

Tzield is in the running for peak sales of about $1.2 billion in 2030, the analysts noted.

A Sanofi M&A deal has been in the cards since December, when the company was outbid by Amgen in the race to acquire rare disease drugmaker Horizon. While Amgen ultimately took home the prize for $28 billion, it was Sanofi that kicked off the interest in Horizon when it first floated an unexpected cash offer for the company, a 2022 securities filing showed.

At the time, Sanofi declined to comment on its business development strategy following the Horizon pursuit.