In a recent takeover move by France’s pharmaceutical giant Sanofi, the company has committed $2.5 billion to buy Biotech Company Cynthorx. Plans for the takeover are still ongoing, but it seems the selling company has already agreed on terms.
According to Paul Hudson, Sanofi’s new Chief Executive, the new acquisition is in line with the company’s overall objective. It’s a perfect match for the firm’s high-line of impressive portfolios to lead in technology and innovation in the health sector. He reiterated that the company wants to grow Cynthorx to the level it should be.
Hudson also reassured investors of the company that there is no cause for alarm, stating that Sanofi has good plans for the company and its investors. He further stated that very soon, the investors will begin to reap the benefits of sticking with the new owner of Synthrorx during the acquisition period.
Hudson assured investors that they are going to retain and work with some of the pillars of Synthorx to ensure a smooth transition and further involvement in the medical community. Hudson also revealed that the acquisition is in line with the company’s resolve to build its oncology franchise that will focus on the fast-changing health practices.
Last year, Synthorx recorded a market loss of $56.6 million. According to the firm’s website, the firm is a biotech company that focuses on therapies for people with early-stage of cancer. However, things have not been quite rosy for the company, which prompted its decision to sell to a bigger company with better resources.
The company sold at a high price
The acquisition is still ongoing, as there are lots of processes involved. But Sanofi believes everything will be sorted out before the second quarter of next year.
In a recent note, Liberum analysts said that THOR-707, the share name of Synthorx, has a heavy price tag. They backed their claim by pointing out that the share is still in phase 1 trial, and it’s currently plummeting in value. They said that selling the shares at a 172% premium even when the company’s share is still going down is ridiculously too high.
Hudson already initiating significant changes
On September 1, Hudson became the new CEO of Sanofi. He has already started laying his marks by initiating some changes within the organization. He is the one spearheading the purchase of Synthorx, and there are other innovations and paradigm shifts he is proposing. Hudson has indicated that there will be a huge change within the organization after the Dec. 10 Investor Day meeting in Cambridge.
There are reports that Hudson and the management team are contemplating an outright sale or a joint venture for the company’s consumer healthcare unit. Just last week, Sanofi entered an agreement to sell its Seprafilm department to Baxter International. Sanofi values the department for around $350 million. From the agreement, Baxter is expected to pay in cash.