US-based Regeneron Pharmaceuticals has decided to repurchase around $5bn of its common stock directly from France’s Sanofi, without any changes to their ongoing partnership.
The decision comes after Sanofi announced plans to sell its equity investment in Regeneron under a registered public offering. The French company owns approximately 23.2 million shares of Regeneron’s common stock, or around a 20.6% stake.
The public offering will take place simultaneously in the US and internationally through underwriters led by BofA Securities and Goldman Sachs as joint book-running managers. Boards of directors of both companies approved the transaction.
Regeneron intends to fund the purchase with a combination of $3.5bn in cash on hand and $1.5bn in financing from Goldman Sachs Bank USA.
After the public offering and related share repurchase, Sanofi will continue to hold some 400,000 shares of Regeneron’s common stock.
Sanofi CEO Paul Hudson said: “Sanofi remains committed to continuing our collaboration with Regeneron which remains an integral part of our overall strategy, and this decision was fully aligned with Regeneron.
“The decision to divest our holdings is consistent with our efforts to enhance value creation for our shareholders. We believe the proceeds from this transaction will help further our ability to execute on our strategy to drive innovation and growth.”
The companies have been collaborating since 2003 and Sanofi purchased a shareholding in Regeneron in 2004. Their partnership has led to five approved treatments so far, with more candidates in clinical development.
Recently, the company launched a clinical programme of rheumatoid arthritis drug Kevzara (sarilumab) to treat hospitalised patients with severe Covid-19.
Kevzara is a fully-human monoclonal antibody, which inhibits the interleukin-6 (IL-6) pathway, being co-developed by Sanofi and Regeneron.
The Phase II/III trial will compare the safety and efficacy of Kevzara in combination with usual supportive care, to placebo and supportive care combination.