Drugmaker Sanofi in $3.2bn deal to catch up in mRNA vaccine technology     

Sanofi shares rose less than 1% in Paris while Translate Bio surged in US exchanges.

Sanofi will buy its messenger-RNA development partner Translate Bio for $3.2bn (€2.7bn) as the French drugmaker plays catch-up in deploying the technology behind some of the world’s top-selling Covid-19 vaccines.

Sanofi agreed to pay $38 (€32) in cash for each of Translate Bio’s shares. 

While the price is 30% above the recent closing price, the company is getting a potential bargain “in a very hot therapeutic area”, said Wimal Kapadia, an analyst at Bernstein.

Ordinarily a giant in the vaccines space, Sanofi has lagged behind upstarts BioNTech and Moderna in the pandemic as they raced ahead with mRNA shots that have now been injected into arms more than a billion times. 

Those two companies have been lavishly rewarded for their pioneering work, with Moderna’s market valuation rocketing toward $140bn (€118bn) and BioNTech’s valuation now exceeding $80bn (€67bn). 

Pfizer, which is partnered with Germany’s BioNTech, said last week that their coronavirus shot could bring in $33.5bn (€28.2bn) in revenue this year alone. 

Harnessing mRNA for other treatments

Sanofi’s thinking extends beyond vaccines and aims to harness mRNA for treatments — something BioNTech is investigating for cancer.

“Our goal is to unlock the potential of mRNA in other strategic areas such as immunology, oncology, and rare diseases in addition to vaccines,” said Sanofi chief executive Paul Hudson.

Sanofi shares rose less than 1% in Paris while Translate Bio surged in US exchanges. The boards of both companies approved the transaction, according to a statement. 

“We like Sanofi’s approach,” Bernstein’s Kapadia wrote in a note to clients, although it’s a little early to know whether the takeover is a bargain.

The drugmaker hasn’t brought a Covid vaccine to market yet. 

Its leading candidate is based on the recombinant-protein technology already in use in the company’s seasonal flu shots. 

That product, which suffered months of delays, is now in a late-stage trial and could gain clearance by the end of the year.

But the French drugmaker has also been working on an mRNA Covid shot with Translate Bio since March 2020. 

Vaccines for five infectious-disease pathogens

That effort grew out of a partnership between the companies, forged in 2018, to develop mRNA vaccines for as many as five infectious-disease pathogens. 

Their coronavirus candidate is currently in an early-stage trial, with results expected by the end of September, and it could be approved in 2022.

Translate Bio, based in Massachusetts, is also developing an early-stage flu vaccine with Sanofi. 

Its pipeline includes experimental therapies for cystic fibrosis and other lung ailments, along with treatments for diseases that affect the liver.

“Sanofi is working hard to catch up with its competitors in the mRNA area,” said Jean-Jacques Le Fur, an analyst at Bryan, Garnier & Co. 

“We see this acquisition as a good move, especially not to be left behind,” as has happened to the company in other fields such as cancer and diabetes.

• Bloomberg