Sanofi Makes US$1.9 Billion Offer to Buy Kadmon Holdings to Solidify Its Transplant Business

Source: Streetwise Reports   09/08/2021

Shares of Kadmon Holdings Inc. traded 70% higher after the firm reported it agreed to be acquired by Sanofi SA for $9.50 per share in cash. Sanofi aims to strengthen its transplant business with the addition of Kadmon’s Rezurock™ (belumosudil), an FDA-approved, first-in-class treatment for patients 12 years and older with chronic graft-versus-host disease.

Prior to the open of U.S. markets today, biopharmaceutical company Kadmon Holdings Inc. (KDMN:NYSE), which is focused on discovery, development, and marketing of transformative therapies for diseases with significant unmet medical needs, announced that it entered into a definitive merger agreement with global pharmaceutical company Sanofi SA (SNY:NYSE).

The firm advised that under the terms of the agreement, Kadmon shareholders will receive $9.50 in cash for each common share owned, which on a fully diluted basis equates to a total equity value of about $1.9 billion. The company noted that “the offer price represents a premium of 79% over the closing price on September 7, 2021 and a premium of approximately 113% over the 60 trading days volume weighted average price.”

The acquisition by Sanofi’s aligns well with its strategy to continue with strengthening its transplant business and grow its General Medicines core assets. The purchase provides Sanofi with the full rights and ownership of Kadmon’s Rezurock™ (belumosudil), which was described as “a recently FDA-approved, first-in-class treatment for chronic graft-versus-host disease (cGVHD) for adult and pediatric patients 12 years and older who have failed at least two prior lines of systemic therapy.”

Olivier Charmeil, EVP of General Medicines at Sanofi stated, “We are transforming and simplifying our General Medicines business and have shifted our focus on differentiated core assets in key markets…We are thrilled to add Kadmon’s Rezurock to our well-established transplant portfolio.”

“Our existing scale, expertise, and relationships in transplant create an ideal platform to achieve the full potential of Rezurock, which will address the significant unmet medical needs of patients with chronic graft-versus-host disease around the world,” Charmeil added.

Kadmon Holdings’ President and CEO Harlan Waksal, M.D. commented, “We are excited that Sanofi has acknowledged the value of Rezurock and the deep potential of our pipeline…By leveraging Sanofi’s global resources and long-standing expertise in developing and commercializing innovative medicines, Rezurock is now well positioned for global accessibility, faster.”

Sanofi is pleased to add Rezurock™ (belumosudil) to its existing transplant portfolio, which includes Thymoglobulin^® (anti-thymocyte globulin) and Mozobil^® (plerixafor). Thymoglobulin was identified to be “a polyclonal, anti-human thymocyte antibody preparation that acts as a broad immunosuppressive and immunomodulating agent” and Mozobil was described as “a hematopoietic stem cell mobilizer.” Both Thymoglobulin and Mozobil are considered core General Medicine assets of Sanofi and are presently registered and approved for sale and use in over 65 countries.

The report stated that that in July 2021, the U.S. Food and Drug Administration (FDA) granted approval of Rezurock for use in treatment in adult patients and children 12 and up with chronic graft-versus-host disease (cGVHD) after the failure of at least two prior lines of systemic therapy in July 2021. The company explained that Rezurock “is the first and only approved small molecule therapy that inhibits the Rho-associated coiled-coil kinase 2 (ROCK2), a signaling pathway that modulates inflammatory response and fibrotic processes.” Sanofi plans to expedite regulatory approvals and use of Rezurock in many additional territories to allow those suffering from cGVHD to benefit from belumosudil treatment as soon as possible.

The report stated that each company’s respective Boards of Directors have already unanimously approved the transaction, which is expected to close in Q4/21, subject to Kadmon shareholder approval, ordinary closing conditions, and regulatory approvals.

Kadmon is a biopharmaceutical company based in New York, N.Y, that seeks to discover, develop, and deliver transformative therapies to address unmet medical needs. In addition to its oral, once-daily tablet Rezurock™ (belumosudil), the company’s drug candidate pipeline includes medicines for immune and fibrotic diseases and immuno-oncology therapies.

Sanofi is a global biopharmaceutical company based in Paris, France. The firm has a market cap of about $129 billion and is engaged in research, development, manufacture, and marketing of medicines and vaccines to alleviate pain and suffering. The company employs greater than 100,000 people in around 100 countries.

Kadmon Holdings began the day with a market cap of around $913.5 million with approximately 172.4 million shares outstanding and a short interest of about 18.5%. KDMN shares opened 73% higher today at $9.18 (+$3.88, +73.21%) over yesterday’s $5.30 closing price and reached a new 52-week high price this morning of $9.20. The stock has traded today between $9.11 and $9.20 per share and is presently trading at $9.14 (+$3.84, +72.45%).

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