French pharmaceutical giant Sanofi (SNY) is jumping into the same technology used to develop Covid-19 vaccines with the $3.2 billion acquisition of Translate Bio (TBIO), leading TBIO stock to soar Tuesday.
Sanofi joins a growing list of pharma companies pushing deeper into messenger RNA, or mRNA, a bodily mechanism manipulated by Covid vaccines from Pfizer (PFE) with BioNTech (BNTX) and Moderna (MRNA). Sanofi was already partnered with Translate Bio on Covid and influenza shots.
“Translate Bio adds an mRNA technology platform and strong capabilities to our research, further advancing our ability to explore the promise of this technology to develop both best-in-class vaccines and therapeutics,” Sanofi Chief Executive Paul Hudson said in a written statement.
He added owning Translate Bio’s platform outright affords Sanofi the ability to “develop additional opportunities in the fast-evolving mRNA space.” Sanofi plans to work in immunology, oncology and rare diseases, in addition to vaccines.
In morning trades on the stock market today, TBIO stock vaulted 29.2% higher near 37.70.
TBIO Stock Surges On Takeover Deal
Sanofi says the deal builds on its recently established mRNA Center of Excellence. In late June, the company said it would pay 400 million euros annually, or about $475 million, to accelerate mRNA research and development.
At the time of the announcement, Sanofi expected to have a minimum of six clinical candidates by 2025. But this deal could bolster that number.
Translate Bio’s latest-stage candidate is in cystic fibrosis. The biotech company is also working on inhaled treatments for lung diseases and vaccines for viral and bacterial pathogens. Translate Bio is exploring the potential use of mRNA on diseases that affect the liver.
The deal values TBIO stock at $38 per share in cash. The price represents a 56% premium to the volume-weighted average price of TBIO stock over the past 60 days. Sanofi expects the tender offer to begin later this month. Sanofi plans to fund the deal with cash on hand.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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