Sanofi Agrees to Buy Principia Biopharma Inc. for Roughly $3.4 Billion

French multinational pharmaceutical company Sanofi has agreed to purchase U.S. biotech company Principia Biopharma Inc. for about $3.4 billion in an all-cash deal.

As part of the deal, Sanofi will be taking full control of the company, which focuses on treatments for multiple sclerosis and a range of autoimmune disorders.

Sanofi will secure drugs such as the BTK inhibitor SAR442168 for multiple sclerosis and other central nervous system diseases. It was found to have benefited patients with multiple sclerosis in Phase 2 trials in February, prompting Sanofi Chief Executive Officer Paul Hudson to say the treatment could grab half of the $20 billion therapies market for the incurable disease.

Sanofi will pay $100 per share, according to a statement, representing a 10% premium over this past Friday’s closing price of Principia’s shares. Shares have exploded nearly 66% this year. The aggregate equity value of the deal is approximately $3.7 billion, including Principia’s cash, according to Sanofi.

“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” said Hudson. “The addition of multiple BTK inhibitors to our pipeline demonstrates our commitment to strategic product acquisitions in our priority therapeutic areas. Full ownership of our brain-penetrant BTK inhibitor ‘168 removes complexities for this priority development program and simplifies future commercialization.”

“The Phase 2b data in relapsing multiple sclerosis showed the strong potential of ‘168 to address disability and disease progression, and triggered the start of Phase 3 studies across the full spectrum of MS. Through this acquisition, we will be able to expand and accelerate development of BTK inhibitors across multiple indications. Both ‘168 and rilzabrutinib, have ‘pipeline in a product’ potential, and we look forward to unlocking their full treatment benefits across an array of diseases,” said John Reed, M.D., Ph.D., Global Head of Research & Development at Sanofi.

“Principia’s successful design and development of a whole portfolio of BTK inhibitors for immunology is aimed to transform the treatment for patients with immune-mediated diseases. By combining with Sanofi, we will bring significant resources to expand and accelerate the potential benefits of these therapies. The benefit of developing several BTK inhibitors will allow us to target specific organ systems for optimal patient benefit. The merger will provide global resources to get these novel therapies to patients faster,” said Martin Babler, President and CEO at Principia Biopharma.

It was in July that Bloomberg reported Sanofi was studying potential acquisitions of U.S. biotechnology firms, including Principia.

The deal between the two companies marks the second-largest pharmaceutical acquisition this year after Gilead Sciences Inc. agreed to pay $4.9 billion to buy cancer therapy maker Forty Seven Inc. back in March.

“Through this acquisition, we will be able to expand and accelerate development of BTK inhibitors across multiple indications,” John Reed, Sanofi’s research head, said in the statement.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.