Sanofi (SNY) to Acquire Kymab to Boost Immunology Presence

Sanofi (NASDAQ:SNY) SNY announced an agreement to acquire Kymab, a small biotech for an upfront payment of approximately $1.1 billion and potential milestone payments of up to $350 million. The acquisition will build on Sanofi’s leading presence in immunology.

Kymab focuses on developing fully human monoclonal antibody therapeutics with a focus on immune mediated diseases and immuno-oncology. With the acquisition, Sanofi will gain full global rights to Kymab’s lead pipeline candidate KY1005, a potential treatment for a range of immune and inflammatory diseases. KY1005, a human monoclonal antibody, has a novel mechanism of action as it targets key immune system regulator OX40L.

KY1005 met both primary endpoints in a phase IIa study evaluating it for the treatment of moderate-to-severe atopic dermatitis in patients whose disease is inadequately controlled with topical corticosteroids. Meanwhile, Kymab’s pipeline also has KY1044, an ICOS agonist monoclonal antibody, which is in early-stage development. The transaction is expected to close in the first half of 2021.

In the past year, Sanofi’s shares have lost 5.7% against the industry’s 4% increase.

In September last year, Sanofi bought San Francisco-based late-stage biotech Principia Biopharma (NASDAQ:PRNB) for approximately $3.68 billion, which also strengthened its presence in immunology. This acquisition added Bruton tyrosine kinase (BTK) inhibitors for immune-mediated diseases, SAR442168 and rilzabrutinib, to Sanofi’s pipeline.

Sanofi has significantly stepped up its acquisition and alliance activity over the years. Some key acquisitions include Genzyme Corporation in 2011, Chattem in 2010, and Ablynx and Bioverativ in 2018. In early 2020, Sanofi bought small cancer biotech Synthorx, which added its lead pipeline asset, THOR-707 to Sanofi’s immuno-oncology portfolio. In 2017, it swapped its Merial Animal Health businesses with Boehringer Ingelheim’s Consumer Healthcare (CHC) business. Sanofi has developed and markets Dupixent, Kevzara, Praluent and Libtayo in collaboration with Regeneron (NASDAQ:REGN) REGN.

Sanofi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked large drug/biotech stocks are Merck MRK and Alexion Pharmaceuticals (NASDAQ:ALXN) ALXN, both with a Zacks Rank #2 (Buy).

Merck’s shares have risen 7.3% in the past six months while its earnings estimates for 2021 have risen 1.5% over the past 90 days.

Alexion’s shares have gained 47% in the past six months while its earnings estimates for 2021 have risen 3.1% over the past 90 days.

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