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), which traded as high as $27.34 on June 23, ended the day at $23.87, for a gain of $7.63, or 47%.
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 stock had closed June 22 at $16.24. 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 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-gram batches per month. “We can get to that kind of scale in a very small footprint,” Renaud said. Translate Bio’s platform synthesizes unmodified mRNA molecules at high purity, which are formulated with lipid nanoparticles (LNPs), which can, in turn, be modified to optimize delivery to specific tissues.
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. The company still retains 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.
Sanofi’s two shots on goal
Sanofi’s vaccines arm, Sanofi Pasteur, has two shots on goal for COVID-19 and today disclosed that it was accelerating by two months the expected start of clinical trials for its other program, which is based on its baculovirus expression system. Sanofi has entered an alliance on that program with London-based Glaxosmithkline plc, which is supplying its AS03 adjuvant.
It now aims to begin a phase I/II trial in 400 volunteers in September and to report initial data by the year end. This, it hopes, will enable to it obtain emergency use authorization (EUA) in January, by which time it will have in place capacity to make 100 million doses. It aims to start a phase III trial in January as well and could obtain full approval by June, according to an updated schedule set out June 23 by John Shiver, Sanofi Pasteur’s head of R&D, during a virtual R&D event for analysts.
“This is a derisked technology, with established capacity in place, which we can leverage,” he said. The same platform underlies its approved influenza virus vaccine, Flublok. By mid-2021, it aims to have annual capacity for about 1 billion COVID-19 vaccines in place. “There’s obviously a degree of uncertainty around this, as vaccine manufacturing is uniquely complex,” Shiver said.
There are now more than 160 COVID-19 vaccine development programs underway, Shiver said, and about 60% are based on novel gene delivery technologies. Given that this is unproven technology for vaccine development, many may be suboptimal in terms of safety and tolerability and efficacy. Some will be outright failures. At the same time, it will take multiple products to provide global coverage. “This is not a situation where winner takes all,” he said.