Sanofi accelerates mRNA vaccine strategy with $3.2B Translate Bio acquisition

Sanofi ended a dry spell for European pharmaceutical deal-making with the $3.2 billion acquisition of Translate Bio Inc., as France's largest drugmaker accelerated its move into mRNA vaccines.

Under the deal, Paris-based Sanofi will acquire all outstanding shares of Translate Bio for $38.00 apiece, representing a 56% premium on the Lexington, Mass.-based biotech company's 60-day volume-weighted average.

Translate Bio specializes in messenger RNA, or mRNA, technology, which has been used with great success for BioNTech SE-Pfizer Inc.'s and Moderna Inc.'s COVID-19 vaccines. U.S. pharmaceutical giant Merck & Co. Inc. has also expressed interest in the technology, as has Gilead Sciences Inc.

Sanofi's ambition is to have a minimum of six mRNA vaccines for various conditions in clinical trials by 2025, Thomas Triomphe, head of the company's vaccines business, told analysts on a July 29 earnings call.

Translate Bio shares closed up 29.23% at $37.62 at 4 p.m. EDT.

Sanofi's acquisition follows an existing collaboration with Translate Bio that has so far produced experimental mRNA vaccines for COVID-19 and seasonal influenza — both in phase 1 trials — and culminated in June with the French company inaugurating a new vaccines mRNA Center of Excellence across two sites in the U.S. and France to accelerate the development of this pipeline.

The deal, the sixth-largest biopharma acquisition of the year, is expected to close in the third quarter of 2021, subject to customary closing conditions, Sanofi said Aug. 3.

Translate Bio has an early-stage pipeline of treatments for cystic fibrosis and other rare pulmonary diseases, Sanofi noted, as well as ongoing discovery work in liver disease treatments. The U.S. company's mRNA platform can be applied to various classes of treatments, such as therapeutic antibodies or cancer vaccines, Sanofi added.

"Translate Bio adds an mRNA technology platform and strong capabilities to our research, further advancing our ability to explore the promise of this technology to develop both best-in-class vaccines and therapeutics," Sanofi CEO Paul Hudson said in a statement. "A fully owned platform allows us to develop additional opportunities in the fast-evolving mRNA space."

The deal follows Sanofi's acquisition of U.S. biotech company Tidal Therapeutics Inc. in April for an up-front payment of $160 million, which expanded the company's mRNA research capabilities in both immuno-oncology and inflammatory diseases.

Morgan Stanley & Co. International is acting as exclusive financial adviser to Sanofi, with Weil, Gotshal & Manges LLP acting as legal counsel. Centerview Partners is acting as lead financial adviser to Translate Bio, with Paul Weiss Rifkind Wharton & Garrison LLP acting as legal counsel. Evercore and MTS Health Partners LP are also providing financial advice to the U.S. biotech company.

Sanofi, the world's third-largest vaccines maker, reported a 16.2% increase in second-quarter vaccine sales, driven by meningitis vaccines and a recovery in its boosters franchise. A strong performance in the quarter, driven by vaccines and eczema treatment Dupixent, gave the company the confidence to raise its full-year guidance to around 12% growth, Hudson said on the earnings call.