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Sanofi makes another bolt-on with Kadmon
SEP 08, 2021
The “left field but logical” buy sees Sanofi gaining a graft-versus-host disease therapy to add to its transplant offering.
Sanofi’s spending spree continues. This time it is handing over $1.9bn for Kadmon, the once controversial biotech that now has an approved graft-versus-host disease drug, Rezurock.
The acquisition is a little surprising, coming outside oncology and autoimmune diseases, where Sanofi has so far focused much of its M&A firepower. But Kadmon will fit in with the French firm’s transplant business, which comprises Thymoglobulin and Mozobil.
Jefferies analysts called the buy, which comes at a 79% premium to Kadmon’s closing share price yesterday, as “left field but logical”. They added that antitrust concerns are unlikely given minimal overlap between the respective companies' products.
Kadmon looks like a surer bet than some of Sanofi’s other recent purchases. Rezurock was approved in the US in July for the third-line treatment of chronic graft-versus-host disease (GVHD), and Kadmon launched the drug in August. Sellside consensus, compiled by Evaluate Pharma, sees sales peaking at $661m in 2028, but Jefferies sees greater potential, saying peak revenues could reach $1bn.
Sanofi could see upside outside GVHD with Rezurock, a Rock2 inhibitor that is said to rebalance the immune system. The drug is in phase 2 for the autoimmune disorder systemic sclerosis, with a single-arm study set to yield data by the end of this year. A placebo-controlled trial is also ongoing, with results due by the end of 2022.
Rock2 is also involved in fibrosis, and Kadmon had been evaluating Rezurock in idiopathic pulmonary fibrosis. However, a phase 2 study completed this year and IPF is not listed among the group’s pipeline efforts.
Kadmon's only other clinical-stage project is KD033, an anti-PD-L1/IL-15 fusion protein, in phase 1. Cytokines have attracted massive interest from biopharma; if this project works out it would represent a big oncology bonus for Sanofi, but given the track record of IL-2/IL-15 assets this is a big if.
Including the Kadmon deal, Sanofi has now spent nearly $13bn on acquisitions in the past couple of years. Most recently, the group bought the mRNA vaccines player Translate Bio for $3.2bn (Sanofi Translates its mRNA interest into big bucks, August 3, 2021).
There could be more to come: Jefferies noted that Sanofi is still interested in oral immunology projects with “interesting” mechanisms, as well as more oncology assets, and gene editing.
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