Sanofi made a splash in rare disease R&D when it traded $20 billion for Genzyme in 2011, and now the French drugmaker is on the hunt for deals “up to” that size as acquisitive rival Shire angles to dominate the space.
Speaking to the Financial Times, Genzyme CEO David Meeker said the company is surveying the field of rare disease-focused biotech companies, declining to name names. A months-long slump in valuations has made once-pricey targets suddenly more affordable, but Sanofi isn’t feeling pressure to close an acquisition before a potential turnaround, Meeker said.
Among the mid-size players in rare disease are BioMarin Pharmaceuticals, which commands a market cap of around $13 billion, plus Ionis Pharmaceuticals and Ultragenyx, which are worth roughly $4 billion and $2.5 billion, respectively.
The idea dovetails with Sanofi’s recent statements on how it plans to reverse its slumping growth, as recently appointed CEO Olivier Brandicourt has repeatedly said the company is interested in deals big and small to counteract creeping competition and sluggish sales for its banner products.
And rare diseases could be an ideal field to boost Sanofi’s margins. Orphan drugs like Genzyme’s Cerezyme treat small numbers of patients but command high prices, and insurers have traditionally been willing to shell out for such therapies on the belief that they prevent costlier outcomes for sufferers of rare disease. And Meeker is betting those dynamics are unlikely to change despite the furor over drug pricing in the U.S., arguing that the economics of orphan drugs keep the sector “relatively protected from the discussion.”
Meanwhile, the rare disease-focused Shire has signed a $32 billion merger agreement with Baxalta that the company said will make it the largest player in the space, promising to grow revenue to $20 billion by 2020.
By Damian Garde
Source: Fierce Biotech
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
