Sanofi snags another U.S. biotech asset with $3.7 billion deal for Principia Biopharma

By Sudip Kar-Gupta

PARIS (Reuters) – Sanofi SA (PA:SASY) is to buy U.S.-based Principia Biopharma Inc (O:PRNB) for around $3.7 billion, the companies announced on Monday, marking the French healthcare company’s latest acquisition in the biotech sector.

The deal will strengthen Sanofi’s research capabilities in areas such as autoimmune and allergic diseases, the companies said, and will see the French company buy the outstanding shares of Principia for $100 per share in cash.

That represents an aggregate equity value of around $3.68 billion on a fully diluted basis and a premium of 10% to Principia Biopharma’s closing price of $90.74 on Aug. 14.

“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” said Sanofi Chief Executive Paul Hudson (NYSE:HUD).

Sanofi shares edged up 0.6% in early session trading, bucking a slight fall in France’s CAC-40 index (FCHI), as analysts were positive on the deal.

“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 bolt-on deals,” wrote brokerage Jefferies (NYSE:JEF), which kept a ‘buy’ rating on Sanofi.

Sanofi said it expected to complete the acquisition in the fourth quarter of 2020.

“The merger will provide global resources to get these novel therapies to patients faster,” said Martin Babler, president and chief executive at Principia Biopharma.

Sanofi shares are down by around 5% since the start of 2020, whereas the CAC-40 has fallen around 17% this year.

The acquisition of Principia Biopharma follows the French company’s 2018 takeover of U.S. haemophilia treatment specialist Bioverativ for $11.6 billion, and its purchase of biotechnology company Synthorx in December 2019 for around $2.5 billion.