BioPharma, Pharma

Sanofi Commits $1.7B to Buy an Entire Company, But Wants Just a Single Drug

Sanofi is acquiring Inhibrx to get its hands on a drug candidate in pivotal testing for the protein deficiency alpha-1 antitrypsin deficiency, which leads to lung and liver problems. Inhibrx’s remaining assets will be spun out into a new company.

Sanofi has reached a deal to acquire all of biologics drug developer Inhibrx, but the pharmaceutical giant will keep just a single drug candidate. The rest of Inhibrx’s assets will be spun off into a new company that will to continue on developing cancer medicines.

The deal terms announced Tuesday call for Sanofi to pay $30 cash for each Inhibrx share, which values the biotech at $1.7 billion. The share price is less than the biotech’s $33.33 closing stock price on Monday, but it reflects that Sanofi is getting just one asset. Shares of Inhibrx opened Tuesday at $35.50 each. When Inhibrx went public in 2020, it priced shares at $17 apiece.

La Jolla, California-based Inhibrx has proprietary protein engineering technologies which it uses to develop biological drugs for cancer and orphan diseases. These platforms have yielded four clinical stage programs, the most advanced of which is in development for cancer. Sanofi’s interest lies with INBRX-101, which Inhibrx is developing to treat alpha-1 antitrypsin deficiency (AATD), in which patients have low levels of the disease’s namesake protein. AAT’s role is to inhibit neutrophil elastase, an enzyme associated with inflammation. Low AAT protein levels leads to progressive deterioration of tissue in the lungs and liver.

AATD can be treated with augmentation therapy—intravenous infusions of the key protein sourced and purified from healthy donors. Augmentation therapies from companies such as CSL Behring and Grifols require weekly dosing. INBRX-101 is an engineered version of the key protein designed for monthly dosing. In Phase 1 testing, Inhibrx reported this therapy was safe and well tolerated. Last April, the company began a Phase 2 clinical trial that could support the filing of a regulatory submission. This study is evaluating INBRX-1010 as a treatment for emphysema due to AATD. The main goal is measuring the change in average functional AAT in the blood. Inhibrx expects preliminary data in late 2024.

Inhibrx shareholders could receive more beyond Sanofi’s upfront payment. The deal includes a contingent value right that will pay an additional $5 per share if the acquired drug achieves a key milestone. In a regulatory filing, Inhibrx said the milestone is FDA approval of INBRX-101 on or before June 30, 2027. If this milestone is achieved, Sanofi’s payout to Inhibrx shareholders would amount to another $296 million.

“With our expertise in rare diseases and growing presence in immune-mediated respiratory conditions, INBRX-101 will complement our approach to deploy R&D efforts in key areas of focus and address the needs of the underserved AATD patients and communities,” Houman Ashrafian, head of research and development, Sanofi, said in a prepared statement.

Inhibrx’s shareholders will also receive 0.25 shares of the new company formed with the remaining Inhibrx assets. Inhibrx founder and CEO Mark Lappe will lead this new company, which will operate under the Inhibrx name. Sanofi will retain an 8% equity stake in the new Inhibrx, which will be capitalized with $200 million from its parent, according to the deal terms.

By acquiring INBRX-101, Sanofi is picking up an asset that Chiesi Farmaceutici passed up. In 2019, Chiesi paid $10 million to obtain an option to develop INBRX-101 outside of North America. The deal also gave Chiesi the right to negotiate for development and commercialization rights in North America if Inhibrx engaged with other parties for those rights during the option agreement term. Per deal terms, the option agreement expires 60 days after Inhibrx delivers complete Phase 1 data to Chiesi, including the finalized minutes from its meeting with the European Medicines Agency. This past September, Inhibrx announced Chiesi declined to exercise its option on INBRX-101.

Sanofi said it expects to finance the Inhibrx acquisition with available cash. The boards of directors of both Sanofi and Inhibrx have approved the deal, which is expected to close in the second quarter of this year.

Photo: Nathan Laine/Bloomberg, via Getty Images