Sanofi has agreed to buy Kadmon Holdings for $1.9 billion, the latest in a string of acquisitions the French pharmaceutical giant has used to add new drugs and technologies to its portfolio.
The deal, announced Wednesday, has Sanofi paying $9.50 per share in cash for Kadmon, a roughly 77% premium to the biotech's Tuesday closing price and 113% more than its average trading price over the last two months. The acquisition gives Sanofi rights to Rezurock, a drug for graft-versus-host disease the Food and Drug Administration approved in July.
The buyout is the sixth largest, and features the third highest premium, in what's been a comparatively slow year for biotech buyouts, according to data from Biopharma Dive. It's also the sixth acquisition by Sanofi since the beginning of last year, a flurry of activity worth some $10 billion and the most of any pharmaceutical company over that span.
Those deals have given Sanofi a variety of different assets, from a messenger RNA vaccine platform to “off-the-shelf” cell therapies, and together represent a push by the drugmaker to remake itself after pivoting from the cardiovascular and diabetes research for which it's long been known.
Sanofi's newer strategy focuses on specialty drugs, specifically medicines for cancer, immune diseases and uncommon blood disorders. That makes its bet on Kadmon, whose drug will add to Sanofi's portfolio of general medicines, "somewhat unexpected," wrote Jefferies analyst Peter Welford.
Nonetheless, Kadmon's drug could still be complementary, Welford said, as it adds to a group of treatments Sanofi already sells for transplant recipients. The pharma's Mozobil, for instance, helps prepare patients for stem-cell transplants, while the immunosuppressive drug Thymoglobulin is meant to help prevent or treat organ rejection in kidney transplant recipients.
Sanofi is overhauling its general medicines business as well, with plans to focus on "differentiated core assets in key markets," said the executive vice president of the division, Olivier Charmeil, in the statement announcing the deal.
Rezurock is cleared to treat chronic graft-versus-host disease, a condition that affects up to half of the patients who receive bone marrow transplants. The disease is typically treated with steroids and differs from the acute form of the condition, as it develops later, affects more tissues and is generally more mild in nature. But for up to 15% of patients, the symptoms can be severe and debilitating, leading to additional treatment with stronger medications, among them Incyte's Jakafi, given off-label.
Jakafi, however, can lead to anemia and low platelet counts, which are already a concern for chronic graft-versus-host disease patients. Kadmon's drug, a pill, has a different mechanism than Jakafi other drugs for chronic graft-versus-host disease and a more "limited toxicity profile," Jefferies analysts recently wrote, making it a potentially attractive alternative.
The FDA approved Rezurock for adults and children at least 12 years old who haven't responded to at least two treatments. The clearance was based on a clinical trial in which 75% of patients responded to treatment. Those patients were heavily pretreated and hadn't responded to multiple drugs.
Jefferies analysts have forecasted over $1 billion in annual sales for Rezurock, which Kadmon priced at $15,500 per month.
Kadmon is also developing Rezurock for diffuse cutaneous systemic sclerosis. A Phase 2 study is underway. The biotech's pipeline also includes experimental treatments for immune and fibrotic diseases as well as cancer.
Kadmon was founded in 2010 by Sam Waksal, shortly after the one-time ImClone Systems founder finished a prison stint for his part in the Martha Stewart insider trading scandal. The biotech is now run by Harlan Waksal, Sam Waksal's brother.
Kadmon spun out a gene therapy division, MeiraGTx, in 2015 and went public a year later. That $12 IPO price, however, represents its peak: shares have never been worth as much since.
Correction: A previous version of this article misstated the number of deals Sanofi had previously completed since last November.