Sanofi: strengthening its collaboration with Translate Bio in vaccines

  •   26/06/2020 - 10h26
  •   DEHOUI Lionel

Since the beginning of the health crisis caused by the coronavirus, several pharmaceutical companies have been investing in vaccine research. The Sanofi laboratory is one of these companies on the European continent. While the group is at the heart of research, it announced the strengthening of its partnership with Translate Bio on Tuesday. Here are the details of this famous and interesting announcement. According to the Sanofi Group publication, it intends to strengthen its collaboration with the company Translate Bio. The aim of this strengthened partnership is to develop several vaccines to prevent infectious diseases. For this agreement, the French laboratory is ready to make a payment of 2.325 billion dollars to the American biotechnology group. This corresponds exactly to 2.06 billion euros. The complicity between the two is not new.

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Sanofi: strengthening its collaboration with Translate Bio in vaccines
Image copyright: Lionel Allorge

The principle of the agreement

Indeed, the collaboration between the French laboratory and the American company started since 2018. At that time, the two groups were linked by a licensing and collaboration agreement. Currently, they are still engaged in the development of a vaccine against Covid-19. For this reason, Tuesday's agreement covers mRNA vaccines effective against all categories of infectious diseases. By the way, the technology that uses mRNA is special.

Indeed, the cells of the human body receive the message to elaborate certain proteins useful for a specific immune response thanks to this technology using mRNA. As part of this agreement, Sanofi expects to pay €300 million in cash ($425 million) initially to Translate Bio. Subsequently, the laboratory intends to contribute a $125 million equity stake in the capital of its American partner.

 

The share of the two partners

It should be noted that this equity investment will be made at a price of $25.59 per share. This is equivalent to nearly 7.2% of the capital. It also corresponds to a premium of 57.6% considering the closing price of Translate Bio shares on Monday. As a result, all international rights will be exclusively reserved to Sanofi for the development, manufacture and marketing of vaccines against infectious diseases.

Note that the French laboratory is likely to make milestone payments to the Translate Bio technology group of up to $1.9 billion. The objective of this operation is of course the development of vaccines. As for the US group, it will also be entitled to several royalties on international vaccine sales. However, the royalties will be progressive. In addition, Sanofi hopes to begin clinical trials of an mRNA coronavirus vaccine at the end of 2020.

Information: Sanofi will then obtain the necessary regulatory approvals for this treatment as soon as this trial phase is concluded. Regulatory approvals will be obtained in the second half of 2021. Despite this agreement, Sanofi shares lost 0.3% at 92.75 euros at 09:15 GMT on the Paris stock exchange. The share thus signs one of the rare falls within the CAC 40 on Tuesday even if the index is still up 1.33%.