Sanofi, France's biggest drugmaker, has revealed it will buy US biotech Bioverativ for $11.6bn (£8.3bn) to boost its position in rare diseases.
Bioverativ is a specialist in haemophilia and other rare blood disorders which was spun off from biotech giant Biogen last year. The acquisition for $105 per share in cash was unanimously approved by the boards of both companies and offered a 64 per cent premium to Bioverativ's closing price on Friday.
Shares in Bioverativ jumped more than 60 per cent to $104.07 in US morning trading, but Sanofi's shares were down nearly four per cent on France's Cac index.
Sanofi said the move creates a platform for growth in other rare blood disorders. It is the company's first major takeover since 2011 when it bought US biotech Genzyme for about $20bn.
Large pharma groups are increasingly looking to snap up smaller, specialist biotech companies, but Sanofi has failed to seal the deal on multiple bids over the years, including on cancer-focused Medivation (bought by Pfizer in 2016) and Swiss firm Actelion (nabbed by Johnson & Johnson last year).
Olivier Brandicourt, Sanofi's chief executive, said: "Together, we have a great opportunity to bring innovative medicines to patients worldwide, building on Bioverativ's success in driving new standards of care with its extended half-life factor replacement therapies.
"Combined, we will continue to leverage our scientific know-how, disciplined focus and development expertise that best position us to drive value for our shareholders and create breakthrough treatments for patients."
With around 181,000 people affected by haemophilia around the world and annual sales in the sector of about $10bn, haemophilia represents the largest market for rare diseases, Sanofi said. It is expected to grow at a rate of above seven per cent per year through 2022.
In 2016, Bioverativ generated $847m in sales and $41m in royalties off of its two products which it markets in the US, Japan, Canada and Australia. The therapies are also commercialised in the EU and other countries under a collaborative agreement.
Sanofi said the addition of Bioverativ is expected to be immediately accretive to the company's earnings in 2018 and up to five per cent accretive for the following year.
Bioverativ chief executive John Cox, said: "Sanofi brings proven capabilities and a global infrastructure, which we believe will help to more rapidly expand access to our medicines globally and further our mission of transforming the lives of people with rare blood disorders."
Sanofi acquisition of Bioverativ, Edison view: “Due to the competitive pressures on Sanofi’s diabetes business in the US the firm has been forced into making acquisitions which in our view are not completely in line with its long-term strategy”
Andy Smith, analyst at Edison Investment Research, said Sanofi had overpaid for Bioverativ and that it was "forced into making acquisitions which in our view are not completely in line with its long-term strategy" because of competitive pressures on the firm's diabetes business in the US.
"We also believe... it will be harder to create value for shareholders than the Genzyme acquisition, for example, as this acquisition has been made so close to the top of the market."