Sanofi to acquire U.S. Principia Biopharma Inc. for £2.82 billion

Sanofi to acquire U.S. Principia Biopharma Inc. for £2.82 billion
Written by:
Wajeeh Khan
17th August, 10:31
  • Sanofi to acquire U.S. Principia Biopharma Inc. for £2.82 billion.
  • The deal values Principia’s outstanding shares at £76.28 per share.
  • Sanofi bought Bioverative and Synthorx in the previous two years.

Sanofi S.A. (EPA: SAN) expressed plans of acquiring Principia Biopharma Inc. on Monday. The agreement with the U.S. based firm, as per Sanofi, is valued at £2.82 billion and marks its latest expansion in the biotech sector. Earlier in August, Sanofi was charged with manslaughter in birth defects case.

Sanofi gained less than 1% on market open on Monday but lost almost the entire gain in the next hour. On a year to date basis, the French pharmaceutical firm is currently 5% down. It has, however, recovered sharply from the low of £65.15 per share in March. Learn more about the financial analysis of a company.

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Sanofi will buy Principia’s outstanding shares at £76.28 per share

According to Sanofi, the acquisition will help it strengthen its footprint in several research areas, including allergic and autoimmune diseases. The French multinational will purchase Principia’s outstanding shares at a per-share price of £76.28 in cash.

This marks a 10% premium on £69.22 per share; the price at which Principia closed the regular session on Friday. According to CEO Paul Hudson of Sanofi:

“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs.”

Brokerage Jefferies reaffirmed its ‘buy’ rating on the French pharmaceutical company on Monday and stated:

“We like the relatively low-risk value accretion of this deal with longer-term optionality, that fits within the strategy of deploying firepower across numerous bold-on deals.”

Sanofi also highlighted in its announcement on Monday that the deal is likely to be completed in Q4 of 2020. CEO Martin Babler of Principia Biopharma also commented on the merger on Monday and said:

“The merger will provide global resources to get these novel therapies to patients faster.”

Sanofi bought Bioverative and Synthorx in the previous two years

Sanofi has been committed to expanding its footprint in the global healthcare space. Previously, Sanofi bought Bioverative (American haemophilia treatment specialist) in 2018 for £8.85 billion, followed by the Synthorx (biotechnology firm) takeover in 2019 that was valued at roughly £1.91 billion.

Sanofi published its second-quarter financial results in July that topped experts’ forecasts. The company also said last month that the British government will buy £500 million worth of COVID-19 vaccine from Sanofi and GSK combined.  

At the time of writing, the Paris-based company has a market cap of £99.94 billion and a price to earnings ratio of 9.77.

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