Sanofi-Aventis has agreed to buy private US cancer specialist BiPar Sciences Inc. for up to $500 million in the latest bolt-on acquisition by the French drugmaker.
The deal is expected to close in the Q2 of 2009 and is part of CEO Chris Viehbacher’s strategy to grow Sanofi through partnerships and small to mid-sized takeovers as patents on several of its main drugs are to expire.
BiPar is developing tumor-selective cancer treatments in the emerging field of DNA repair. The idea is to prevent cancer cells from repairing their own DNA, causing them to die.
The US company’s most advanced experimental drug, BSI-201, is currently in mid-stage Phase II clinical trials for breast and ovarian cancer.
CM-CIC Securities said in a research note that Sanofi’s oncology portfolio, with drugs such as Taxotere and Eloxatin, represents more than 12% of the €27.6 billion of group sales in 2008, while the oncology market was growing over 10% a year.
“Although this acquisition strengthens its oncology pipeline in the mid term, the result will not show up in its accounts before 2012-2013 in the best case,” analyst Arsene Guekam said, rating Sanofi shares buy with a €57 share target.
Sanofi shares rose as much as 2.4% before easing down to a rise of 0.67% to €41.20 by 0742 GMT, broadly in line with the DJ health index. Sanofi shares have lost 9.3% this year.
Under the agreement, the purchase price will depend on the achievement of milestone payments related to the development of BiPar’s leading drug candidate, BSI-201, and could reach a maximum of $500 million, the two companies said on Wednesday.
Viehbacher, who took over in December, has said he would target small and mid-sized acquisitions of up to €15 billion to build up Sanofi’s position mainly in emerging markets, vaccines, over-the-counter-drugs. He has recently struck deals to increase Sanofi’s presence in Latin America, buying generic drugmakers in Mexico and Brazil. (Reuters)