DUBLIN – Translate Bio Inc. is the first beneficiary to gain from Sanofi SA’s massive $11.7 billion addition to its balance sheet, following its recent disposal of its holdings in long-time partner Regeneron Pharmaceuticals Inc.
Lexington, Mass.-based Translate Bio is getting $300 million up front, another $125 million in equity investment and up to $1.9 billion in milestones under a major expansion of an existing agreement with Paris-based Sanofi to develop mRNA-based vaccines for infectious disease. Translate Bio will also receive tiered royalties on product sales.
Its stock (NASDAQ:TBIO) surged 77% during premarket trading June 23.
Translate Bio has secured generous terms for the equity component of the alliance. Sanofi is buying into the stock at $25.59 per share, which represents a 50% premium on its 20-day moving average prior to the deal being disclosed. The enthusiastic response from investors – the stock reached $28.79 before the market opened – underscores how the deal has transformed Translate Bio’s prospects.
The biobucks element of the deal includes $450 million in milestones attached to their previous 2018 agreement. The deal expansion represents a significant expression of faith in Translate Bio’s mRNA platform on the part of Sanofi. The original deal, which involved $45 million up front and up to $760 million in development, regulatory and commercial milestones, was focused on five pathogens.
“There’s $1.4 billion in incremental value on top of our original agreement here,” Translate Bio Ron Renaud told BioWorld.
In March, Sanofi availed of that original deal structure to include a program directed against SARS-CoV-2. Multiple candidates are in parallel development at this point, and the two partners aim to start clinical development in the fourth quarter. At the same time, it is building a dedicated cGMP suite within an AMRI facility, which will be capable of producing multiple 250 gm batches per month. “We can get to that kind of scale in a very small footprint,” Renaud said.
Depending on the actual dose required, it aims to have sufficient capacity in place to produce between 90 million and 360 million doses annually by the first half of 2021.
“I don’t want to telegraph what we think our dose will come out at,” Renaud said. But its manufacturing process results in high purity, which could push it toward the upper limit of its forecast.
Translate Bio will continue to discover, design and manufacture novel vaccine candidates for current and future pathogens, which Sanofi will develop and commercialize. But Sanofi is also getting direct – and exclusive – access to Translate Bio’s mRNA platform, through the transfer of technology and processes that will enable the big pharma company to develop and manufacture its own vaccines for infectious disease. So, while Sanofi’s vaccines business has a new platform, Translate Bio has a whole new business.
“We did not have a vaccines business plan when we started building this,” Renaud said. It will retain control of the platform for other therapeutic modalities – such as mRNA-encoded antibodies – for infectious disease.
The company was founded almost a decade ago as Rana Therapeutics to pursue the development of therapeutics based on long noncoding RNAs (lncRNAs), which play a regulatory role in gene expression. It pivoted into mRNA-based therapies in 2016 by acquiring its mRNA platform from the Shire Human Genetic Therapies arm of Shire (now part of Osaka, Japan-based Takeda Pharmaceutical Co. Ltd.), and changed its name the following year. Its internal focus has been on developing therapies for genetic disease and, more recently, for pulmonary disease, given its success at nebulizing mRNA molecules for pulmonary delivery.