Sanofi In Deal To Buy Hemophilia Drugmaker Bioverativ For $11.6 Bln; Stock Dips

(RTTNews) - French drug giant Sanofi SA (SNYNF, SNY) Monday announced an agreement to buy US-based hemophilia drugmaker Bioverativ Inc. (BIVV) for around $11.6 billion. The deal expands Sanofi's presence in specialty care and strengthens leadership in rare diseases. Sanofi shares were losing around 4 percent in the early morning trading in Paris.

The deal values the former Biogen Inc. unit, which is focused on therapies for hemophilia and other rare blood disorders, at $105 a share in cash. The price represents a 63 percent premium to Bioverativ's closing price on Friday. Sanofi will commence a tender offer to acquire Bioverativ stock.

Following the successful completion of the tender offer, a Sanofi unit will merge with Bioverativ, and the remaining shares not tendered in the offer will be converted into the right to receive the same $105 per share in cash. The tender offer is expected to commence in February 2018.

The transaction was unanimously approved by both the Sanofi and Bioverativ Boards of Directors.

The acquisition is expected to be immediately accretive to Sanofi's Business earnings per share in fiscal 2018 and up to 5% accretive in fiscal 2019. Sanofi is also projected to achieve ROIC in excess of cost of capital within three years. The company expects to preserve its strong credit rating.

Sanofi expects the addition of Bioverativ to drive meaningful value, with strong cash flows from its growing products expected to increase Sanofi's financial and operational scale.

Bioverativ's extended half-life therapies, Eloctate and Alprolix for the treatment of hemophilia A and B, respectively, represented the first major advancements in the hemophilia market in nearly two decades when launched. In 2016, Bioverativ generated $847 million in sales and $41 million in royalties.

Bioverativ currently markets the two products in the United States, Japan, Canada and Australia, and plans to expand into additional geographies. The therapies are also commercialized in the European Union and other countries under a collaboration agreement.

Sanofi expects to be able to leverage Bioverativ's clinical expertise and existing commercial platform to advance fitusiran, an investigational RNA interference (RNAi) therapeutic for hemophilia A and B, with or without inhibitors. The company recently announced a restructuring of its rare disease alliance with Alnylam Pharmaceuticals, with Sanofi obtaining global development and commercialization rights to fitusiran.

Sanofi plans to finance the transaction with a combination of cash on hand and through new debt to be raised. Subject to the satisfaction or waiver of customary closing conditions, the transaction is expected to close within three months.

Lazard is acting as exclusive financial advisor to Sanofi. Guggenheim Securities and J.P. Morgan Securities LLC are acting as financial advisors to Bioverativ.

In Paris, Sanofi shares were losing 3.7 percent to trade at 70.23 euros.