Sanofi's $1.9 Billion Bet On Kadmon: What You Need to Know

Underlining the focus on inorganic growth, French pharma giant Sanofi SNY announced a big-ticket acquisition just a month after another billion-dollar deal.

Sanofi-Kadmon Deal Terms: Sanofi announced Wednesday it has agreed to acquire New York-based biopharma Kadmon Holdings, Inc. KDMN in a $1.9 billion all-cash deal.

The per-share value of the deal works out to $9.50 per share, a 79% premium over Kadmon's closing price of $5.30 on Tuesday. The Boards of both companies have unanimously approved the proposed transaction, and 

The closing of the transaction is subject to customary closing conditions, including approval of Kadmon shareholders. It will likely close in the fourth quarter, and the companies expect the deal to be modestly dilutive to Sanofi's earnings per share in 2022.

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Sanofi-Kadmon Deal Logic: The proposed Kadmon deal brings to Sanofi's transplant portfolio Rezurock, a commercial asset. The Food and Drug Administration recently approved Rezurock to treat adult and pediatric patients 12 years and older with chronic graft-versus-host disease after failure of at least two lines of systemic therapy. It was launched in the U.S. in August.

The deal, according to Sanofi, will support its strategy to continue to grow its General Medicine core assets. "Our existing scale, expertise, and relationships in transplant create an ideal platform to achieve the full potential of Rezurock, which will address the significant unmet medical needs of patients with chronic graft-versus-host disease around the world," said Olivier Charmeil, EVP, General Medicines, at Sanofi.

Kadmon CEO Harlan Waksal sees the deal accelerating the global accessibility of Rezurock by leveraging Sanofi's global resources and long-standing expertise in developing and commercializing innovative medicines.

Kadmon is also developing Rezurock for treating diffuse cutaneous systemic sclerosis in a Phase 2 trial. The company's pipeline also included drug candidates for immune and fibrotic diseases as well as immuno-oncology therapies.

In early August, Sanofi announced a deal to buy mRNA therapeutics company Translate Bio, Inc. TBIO for $3.2 billion.

Price Action: In premarket trading Wednesday, Kadmon jumped 77.5% at $9.38. Sanofi shares closed 1.09% lower at $51.56 on Tuesday. 

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