Sanofi to acquire US-based Principia for USD 3.7 billion

The acquisition, announced by the two companies on Monday, gives the French drugmaker Principia's pipeline in autoimmune diseases. They include a drug aimed at the rare but painful skin condition pemphigus and another against multiple sclerosis that the two companies have partnered on since 2017.

Sanofi is paying $100 per share in cash for the U.S. firm, a premium of 10% to Principia's closing price on Aug. 14, and hopes for a fourth-quarter completion.

With Hudson at the helm Sanofi, which raised $11.7 billion by unloading a stake in Regeneron in May, is following a game plan he deployed when he led Novartis's drugs division: Deploying cash to add bolt-on targets to expand in treatment areas where medicines typically command high prices.

The transaction is Hudson's second big bolt-on purchase since becoming CEO last year, having paid $2.5 billion in December for Synthorx that is developing immuno-oncology treatments.

Principia's most-advanced candidate, rilzabrutinib, is in Phase 3 trials against pemphigus, which can cause blisters or pus-filled bumps on the skin and mucous membranes and is caused when the immune system mistakenly makes antibodies that attack the body.

Phase 3 trials are on tap to use another drug candidate for multiple forms of multiple sclerosis.

"This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines," Hudson said in a statement.

In buying Principia's rilzabrutinib for pemphigus and potentially other autoimmune diseases, Hudson aims to challenge Roche, whose Rituxan since 2018 has secured U.S. and European approvals against pemphigus, which historically was treated with high doses of corticosteroids.

Sanofi shares edged up 0.2%, bucking a slight fall in France's CAC-40 index, as analysts viewed the deal as positive. Sanofi shares are down 5% this year, less than a third of the CAC-40's 17% drop.

The deal "fits within the strategy of deploying firepower across numerous bolt-on deals," wrote brokerage Jefferies, which rates Sanofi a "buy".

Evercore is the financial advisor to Sanofi on the deal. Centerview Partners LLC and BofA Securities are advising Principia.