Sanofi shares are trading lower Monday, following news the French drug maker has agreed a deal to buy US haemophilia specialist Bioverativ, for $11.6 billion. While the purchase represents a successful takeover for Sanofi, some analysts suggest the price they have agreed, is high.
By around 0945 BST, Sanofi shares were down 2.80% at €70.91. That drop comes after a relatively steady start to 2018.
Sanofi expands growth plans
Sanofi’s purchase of Biovertiv is its first takeover since 2011. The French firm has launched a number of unsuccessful bids in recent years, for businesses including Medivation and Actelion.
The bid values the rare blood disorder specialist at $105 per share – a 64% premium to Biovertiv’s closing price of $64.11 on Friday.
“With Bioverativ, a leader in the growing haemophilia market, Sanofi enhances its presence in specialty care and leadership in rare diseases, in line with its 2020 Roadmap, and creates a platform for growth in other rare blood disorders,” said Sanofi CEO Olivier Brandicourt.
“Together, we have a great opportunity to bring innovative medicines to patients worldwide, building on Bioverativ’s success in driving new standards of care with its extended half-life factor replacement therapies,” Brandicourt added.
Biovertiv’s CEO was equally upbeat: “Bioverativ was created to bring meaningful progress to people living with haemophilia and other rare blood disorders, and I am extremely proud of the accomplishments we’ve made toward that mission over the past year,” John Cox said.
“Sanofi brings proven capabilities and a global infrastructure, which we believe will help to more rapidly expand access to our medicines globally and further our mission of transforming the lives of people with rare blood disorders,” Cox added.
Drug maker M&A activity hots up
The Sanofi, Biovertiv deal follows a number of other recent tie ups after a pretty quiet 2017 for M&A in the sector. That’s likely as the trend for larger drug firms buying out smaller specialists is considered a good strategy to grow their offerings and add new capabilities to the larger businesses.
In turn, the smaller specialists can more easily reach a broader audience and potentially deliver excellent value returns to investors.