Deal size: $11.6 billion
Date announced: January 22, 2018
Sanofi has been suffering from competition and pricing pressure for years, but in early 2018, now-former CEO Olivier Brandicourt thought he'd found a couple of solutions. He inked back-to-back deals to bolster the French drugmaker's presence in rare diseases.
The first was Bioverativ, a $11.6 billion hemophilia-oriented buyout that brought Eloctate and other marketed hemophilia therapies to Sanofi's stable. It also came with a pipeline of potential future drugs.
Sounded logical at the time. But competition was looming—both from next-gen drugs and future gene therapies—and Sanofi didn’t foresee just how intense that competition would be.
Sanofi closed the deal in March 2018. By the following April, executives were forced to admit that the Bioverativ portfolio was stumbling thanks to Roche’s successful hemophilia launch Hemlibra, which had hit the market months before.
In the first quarter of 2019, Eloctate's sales of €174 million missed consensus estimates of €204 million by 14.7%, ODDO BHF analysts wrote in a note to clients. A 4.2% dip in first-quarter year-over-year sales was "attributable to tougher competition" in the U.S. thanks to Roche's Hemlibra, they wrote.
And since then, the competition has grown worse. Hemlibra picked up a label expansion last fall to treat all hemophilia A patients, with or without factor VIII inhibitors. Analysts now expect the Roche drug to generate more than $2 billion by 2025.
That’s not good for Eloctate. After the second quarter, Sanofi said it would take a $2 billion writedown “mainly related” to Eloctate. For the second straight quarter, its sales were “the real disappointment” in Sanofi’s overall performance, ODDO BHF analysts wrote. On the flip side, hemophilia B treatment Alprolix grew sales 23%.
In all, Wolfe Research analyst Tim Anderson wrote that Sanofi "admits to underestimating Hemlibra and expects the competitive pressure to continue.”
After the Bioverativ buyout, Sanofi bought nanobody biotech Abylnx for $4.8 billion. The drugmaker has since scored its first approval from that buyout, Cablivi, to treat a rare blood-clotting disorder.
But the helmsman who struck both deals is no longer with the company. Former CEO Olivier Brandicourt stepped down and was replaced in September by former Novartis executive Paul Hudson.
A Sanofi spokesman said the company believes the buyout will "deliver substantial value" as the company works to build a rare blood disorder franchise that's broader than hemophilia. Pipeline assets from the buy include sutimlimab for cold agglutinin disease and immune thrombocytopenic purpura, he said, plus gene editing candidates in a collaboration with Sangamo.