- 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.
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.