Sanofi to Buy Kadmon for $1.9 Billion to Get Transplant Drug

(Bloomberg) -- Sanofi agreed to buy the U.S. biotech Kadmon Holdings Inc. for $1.9 billion, gaining a potential blockbuster medicine to expand its transplant-drug portfolio.

Kadmon investors will receive $9.50 a share in cash, which is 79% more than Tuesday's closing price, the companies said Wednesday. The New York-based biotech's board cleared the deal, which would mark Sanofi's third major acquisition this year.

Under Chief Executive Officer Paul Hudson, Sanofi has embarked on an acquisition spree to rejuvenate a pipeline that placed the French drugmaker behind rivals in terms of innovation and revenue potential. The agreement comes as health-care deals have been heating up. Last week, private equity firm Advent International and Singapore wealth fund GIC agreed to buy drugmaker Swedish Orphan Biovitrum AB for about $8 billion. 

Kadmon's sole medicine on the market, Rezurock, could garner peak sales of $1 billion, according to analysts at Jefferies. It joins Sanofi's Thymoglobulin and Mozobil, creating synergies in the transplant market, they wrote in a note. 

Sanofi's “scale, expertise, and relationships in transplant” can boost Rezurock, said Olivier Charmeil, who heads the division that will integrate the drug. 

The company also has an immune-oncology treatment in early clinical trials -- an area Sanofi is keen to expand in. Sanofi shares dropped 1% in early Paris trading after the announcement. 

Last month, the French drugmaker agreed to acquire its messenger-RNA development partner Translate Bio Inc. for $3.2 billion, expanding in the technology behind some of the world's top-selling Covid-19 vaccines. In April, Sanofi completed the purchase of Kymab Ltd., a maker of antibody treatments, for $1.1 billion upfront.

The premium for Kadmon is “typical of biotech deals,” according to Jefferies. 

Sanofi expects to complete the purchase in the fourth quarter with existing cash resources, and said the transaction will be “modestly dilutive” to earnings per share next year. Cantor Fitzgerald & Co. and Moelis & Co. advised Kadmon.
 

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