LONDON – After three times rebuffing Novo Nordisk A/S, nanobody specialist Ablynx NV is falling into the arms of Sanofi SA in a €45 per share (US$56 per ADS) deal, valuing the nanobody specialist at €3.9 billion (US$4.8 billion).

That is an increase of 47 percent over Novo's most recent bid on Jan. 8 of €2.6 billion, which had moved up from an offer of €2.38 billion/€28 per share on Dec. 22, and an opening bid of €2.27 billion/€26.75 per share on Dec. 7. (See BioWorld, Jan. 9, 2018.)

The two latter bids from Bagsvaerd, Denmark-based Novo offered additional contingent value rights against the progression of two Ablynx products, of up to €2.50 per share, or a further €212.6 million.

Sanofi's all-cash offer, which is being recommended by the boards of both companies, is at more than double the share price of Ghent, Belgium-based Ablynx in the early days of 2018, before Novo went public on its bids.

With Novo hovering, Sanofi has moved very quickly to reach an agreed price. Olivier Brandicourt, Sanofi's CEO, said that was possible because of the pre-existing collaboration with Ablynx in immune-mediated inflammatory diseases.

"We already work closely together and have developed the highest respect for Ablynx," Brandicourt said.

The acquisition is not a reflection of the tax cut-driven M&A bubble inflating in the sector – with $40 billion in transactions in January – but is happening to support Sanofi's shift toward biologics. "Ablynx will help us as we execute our strategic transition," Brandicourt said during a teleconference held to discuss the deal.

The immediate prize is caplacizumab, Ablynx's anti-von Willebrand factor nanobody for treating the rare and sometimes fatal blood disorder acquired thrombotic thrombocytopenic purpura. The product has been filed for approval by the EMA and is due to be filed with the FDA in the first half of 2018. It is expected to launch in 2018 in Europe and 2019 in the U.S.

The move to acquire Ablynx comes a week after Paris-based Sanofi sealed a $11.6 billion agreement to acquire Bioverativ Inc., the Biogen Inc. spin-off that owns two extended half-life recombinant protein therapies, Eloctate (antihemophilic factor) and Alprolix (coagulation factor IX), for treating hemophilia A and B, respectively. (See BioWorld, Jan. 23, 2018.)

The French pharma company also holds the global rights to fitusiran, an antithrombin-targeting RNAi therapy for hemophilia, developed by Alnylam Pharmaceuticals Inc.

The acquisition of Ablynx will further strengthen Sanofi's position in rare blood disorders, complementing the purchase of Bioverativ and the fitusiran rights, said Brandicourt.

Ablynx came into play following the publication in October of positive data from the phase III trial of caplacizumab. The company rode the positive news to raise $230 million in an IPO on Nasdaq, doubling its market capitalization. (See BioWorld, Oct. 3, 2017.)

On the back of the phase III data, Ablynx also increased its estimate for the combined European, Japan and U.S. market for caplacizumab, from €800 million per annum to €1.2 billion per annum.

That gave the company the heft to refuse to engage Novo's offers, which the board of Ablynx said not only undervalued the pipeline products, but also did not reflect the value inherent in its nanobody technology platform.

Although it has a number of high-profile collaboration partners, Ablynx has brought caplacizumab to the point of approval entirely under its own steam. That allowed the company to retain 100 percent ownership and also to validate the power of the bispecific antibody technology.

Following behind caplacizumab is ALX-0171, an inhaled treatment for respiratory syncytial virus (RSV), which also is wholly owned by Ablynx. The product has completed dose escalation in a phase IIb study in 36 infants hospitalized as a result of the infection.

The study is now recruiting an additional 144 infants, with top-line results expected in the first half of this year. With Sanofi having in-house RSV programs, Brandicourt said ALX-0171 will fit in well.

The nanobody platform potential

Ed Moses, CEO of Ablynx since its formation in 2001, said the focus has always been on unlocking the value of the nanobody platform for patients. That is now validated by clinical data. "As we look ahead, we believe Sanofi's global infrastructure, commitment to innovation and commercial capabilities will accelerate our ability to deliver our pipeline," Moses said.

It also is important to Moses and the other stakeholders that Brandicourt pledged to maintain and support Ablynx's operations in Ghent.

Sanofi's bid factors in the possibility of positive clinical data later this year and also reflects the value inherent in the platform, said Peter Welford, analyst at Jefferies in London. "We view the agreed bid to be fair and doubt counteroffers will emerge," he said.

Certainly, Novo was swift to confirm that it will not be making a revised proposal.

It will remain to be seen if Sanofi fully mines the nanobody technology platform, based originally on llama and camel antibodies, which apart from being smaller than human counterparts are far easier to manufacture.

As Welford noted, Ablynx's ongoing collaboration deals with big pharma have milestones of more than €10.6 billion attached to them, making his €7 per share valuation of the nanobody platform – or just 5 percent of agreed milestones – look somewhat conservative.

That will look modest indeed if the lead partnered program, vobarilizumab, an anti-IL-6R nanobody, bears fruit in the treatment of rheumatoid arthritis (RA) and systemic lupus erythematosus (SLE).

Abbvie Inc. has exclusive option rights to the product, which has positive phase IIb results in RA, with top-line results from a phase IIb SLE study due in the first half of the year.

Ablynx has held end-of-phase II meetings with the EMA and FDA to discuss the design of a phase III program, but decided to await the results of the SLE study and the outcome of Abbvie's decision on whether to opt-in to vobarilizumab, based on the SLE results, before moving forward.

If Abbvie takes up the option, it is due to make a $25 million milestone payment and will have an obligation "to use commercial reasonable efforts" to advance vobarilizumab in RA.

Should Abbvie not opt-in, all rights to vobarilizumab will revert to Ablynx.

Meanwhile, Ablynx is continuing the open-label extension study in RA for patients who completed the phase IIb studies, with 94 percent opting to roll over.

Brandicourt declined to express an opinion on the likely future of Ablynx's relationship with Abbvie, nor on the implications for Ablynx's partnership with Merck & Co. Inc. in immuno-oncology, a field where Sanofi currently is collaborating with Regeneron Pharmaceuticals Inc. "We don't have the details of the contracts at this stage," Brandicourt said.

Just two weeks ago, Regeneron and Sanofi announced they are to accelerate development of the lead program in their collaboration, investing $1.64 billion in cemiplimab (REGN-2810), a PD-1 antibody. The investment, to be equally funded by the two companies, is a substantial step up from the $325 million they committed when the oncology agreement was signed in 2015. (See BioWorld, Jan 9. 2018.)

Over and above the 45 nanobodies currently in preclinical and clinical development, the acquisition of Ablynx will add firepower to Sanofi's discovery R&D, said Elias Zerhouni, the company's president of global R&D. It is becoming clear both that multiple products are needed to address specific diseases and that it is necessary to address multiple targets with a single molecule.

"Nanobodies are also very interesting because of their small size, they can get to targets you can't [reach] with conventional antibodies," Zerhouni said.

With more than 2,000 patients treated in trials to date, the nanobody platform is largely de-risked.

"Bringing it in-house means we can take a broader approach," Zerhouni said. "The platform provides a terrific opportunity for Sanofi's R&D."

Sanofi has set up a bank credit facility to finance the acquisition, which its chief financial officer, Jerome Contamine, said will be neutral to earnings per share in 2018 and 2019. He anticipates that the deal will close before the end of the second quarter.

No Comments