By Dominique Vidalon and Christian Lowe
PARIS (Reuters) - France's Sanofi (PA:SASY) on Monday agreed to buy California-headquartered biotechnology firm Synthorx (O:THOR) in a cash deal worth about $2.5 billion as it steps up a push in the lucrative field of cancer drugs under its new chief executive.
Sanofi has offered to buy all the outstanding shares of Synthorx common stock for $68 per share in cash, or a 172% premium to Synthorx's closing price on Dec. 6, 2019.
"This acquisition fits perfectly with our strategy to build a portfolio of high-quality assets and to lead with innovation, as you will hear at our Capital Markets Day tomorrow, December 10," Sanofi Chief Executive Paul Hudson said in a statement.
"Additionally it is aligned with our goal to build our oncology franchise with potentially practice-changing medicines and novel combinations."
Synthorx, which posted a 2018 net loss of $56.6 million, is a clinical-stage biotech company focused on therapies for people with cancer and auto-immune disorders, according to the company's website.
HIGH PRICE?
Sanofi expects to complete the acquisition in the first quarter of 2020.
By 0946 GMT, Sanofi shares were down 0.7% at 82.94 euros.
"The acquisition price is full at a 172% premium to Synthorx Dec. 6 close price and is a lot to pay for an early stage pipeline (lead drug THOR-707 is in phase 1 trial," Liberum analysts said in a note.
Sanofi is conducting a broad strategy review under Hudson, who took over as CEO on Sept. 1. He will give initial pointers on which businesses he wants to focus on at the investor day in Cambridge, Massachusetts on Dec. 10.
Hudson has indicated significant changes were underway.
"I am bringing a little sense of urgency and prioritization. I have set a tone already that we can move a little bit faster," Hudson told reporters in October.
"I think we have the right level of resources although perhaps not always in the right place."
Sources have told Reuters Sanofi was contemplating a joint venture or an outright sale among options for its consumer healthcare unit.
In an early sign of the new strategy, Sanofi last week agreed to sell its Seprafilm unit to medical supply company Baxter International (NYSE:BAX) for $350 million in cash.
Sanofi also told staff its most senior strategy boss, Muzammil Mansuri, would leave, according to an internal memo seen by Reuters.