Olympic Sponsor Sanofi Makes Major Play In Rare Disease Arena $2.2 Billion Acquisition Of Inhibrx Project

In a strategic move to bolster its rare disease business, Sanofi SA (NASDAQ:SNY) has agreed to acquire the drug development project INBRX-101 from its parent company, Inhibrx Inc (NASDAQ:INBX). This acquisition is valued at approximately $2.2 billion.

What Happened: The French healthcare company announced the acquisition on Tuesday, as reported by Reuters. The deal includes a cash payment of $30 per share to Inhibrx shareholders, along with a contingent value right (CVR) of $5 and 0.25 shares in New Inhibrx. This new publicly traded company will hold assets unrelated to INBRX-101.

INBRX-101 is an experimental drug currently in the second phase of clinical trials. It is designed to treat Alpha-1 Antitrypsin Deficiency (AATD), a rare inherited disease that causes progressive lung tissue deterioration.

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Sanofi, which primarily generates revenue from anti-inflammatory treatments, had previously shifted its strategy to focus on research and development (R&D). This move, led by CEO Paul Hudson, resulted in a 15% drop in share price. The acquisition of INBRX-101 is seen as a step towards strengthening Sanofi’s rare disease business.

Following the acquisition, New Inhibrx will continue to operate under the “Inhibrx” name, with Mark Lappe as Chairman and CEO. Sanofi will also retire Inhibrx’s outstanding third-party debts and provide $200 million in cash to fund New Inhibrx. Additionally, Sanofi will retain an 8% equity interest in New Inhibrx.

Why It Matters: This acquisition comes on the heels of Sanofi’s ambitious plans to bolster its pipeline. In December 2023, the company revealed that it had 12 drugs in development with blockbuster potential, including nine medicines and vaccines, each with €2 billion – €5 billion ($2.17 billion – $5.43 billion) in peak sales potential. This move was part of Hudson’s strategy to expand the company’s R&D budget.

Furthermore, Sanofi’s recent sponsorship of the 2024 Olympic Games in Paris was seen as a cultural transformation, signaling the company’s commitment to diversity and innovation. The acquisition of INBRX-101 further underscores Sanofi’s dedication to R&D and its efforts to strengthen its position in the pharmaceutical industry.

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