Dive Brief:
- French pharmaceutical company Sanofi on Monday said it will pay $2.9 billion to acquire Provention Bio, a biotechnology company that recently won U.S. approval of a new type of Type 1 diabetes drug.
- Provention Bio gained an OK from the Food and Drug Administration in November for Tzield, an injectable drug that’s meant to delay the onset Type 1 diabetes. The acquisition expands on a marketing agreement Sanofi signed with Provention back in October.
- Provention is the latest company to be acquired by Sanofi since 2020, when CEO Paul Hudson shifted the company’s focus toward drugs for cancer and immune diseases.
Dive Insight:
Tzield’s path to FDA approval was long, having been tossed back and forth between one-time developers MacroGenics and Eli Lilly and then overcoming an initial rejection from the FDA.
The drug’s approval was based on a 2019 study that showed treatment could delay the progression of the disease to a Stage 3 diagnosis. Tzield then drew interest from Sanofi, which agreed to co-market the drug and made an equity investment in Provention.
The acquisition comes at the time when Sanofi has moved away from investing in Type 2 diabetes, long a centerpiece of the company’s drugs business. However, the company views Tzield and Type 1 diabetes treatment as “closer to immunology,” according to comments from Hudson on a recent investor call.
The company is expecting results later this year from a late-stage trial involving patients newly diagnosed with Type 1 diabetes, noted Thomas Smith, an analyst at SVB Securities. Success in the study could potentially help expand the use of Tzield, which Smith predicts could earn $250 million in peak revenues.
“We believe the [Provention] acquisition is a reasonable strategic fit for Sanofi, as the company continues to expand its focus on innovative immunology and disease-modifying therapeutics, combined with its expertise & commercial presence in metabolic disease and the existing partnership,” Smith wrote in a note to clients.
Provention priced the drug at $13,850 a vial, meaning a 14-vial regimen costs $193,900, higher than what analysts had expected.
The companies expect the acquisition will close in the second quarter of this year. Sanofi is will pay $25 per Provention Bio share, more than triple their closing price Friday.