Sanofi to acquire Provention Bio in $2.9B deal

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Following Sanofi‘s $35 million equity investment last month, the global health care company will acquire Red Bank-based Provention Bio Inc. for $25 per share, representing an equity value of approximately $2.9 billion.

In a March 13 announcement, the Paris-based buyer, which has its U.S. headquarters in New Jersey, described the move as a strategic fit, benefiting its intersection of growing immune-mediated diseases and disease-modifying therapies, in addition to its diabetes expertise. The target says the move will help deliver its work to more patients faster.

“The acquisition of Provention Bio builds on Sanofi’s mission to deliver best- and first-in-class medicines and resonates with our purpose of chasing the miracles of science for the benefit of people,” Sanofi Executive Vice President, General Medicines Olivier Charmeil said in a statement. “By coupling Provention Bio’s transformative innovation with Sanofi’s expertise, we aim to bring life-changing benefits to people at risk of developing Stage 3 type 1 diabetes.”

The acquisition builds on an existing co-promotional agreement between the parties for TZIEFLD (teplizumab-mzwv), which would become part of Sanofi’s General Medicines asset portfolio under the deal, helping that company’s strategic shift toward products with differentiated profiles. Provention Bio’s fully owned therapy for type 1 diabetes was approved by the U.S. Food & Drug Administration in 2022 as the first, and only, treatment to delay the onset of Stage 3 type 1 diabetes (T1D) in adults and pediatric patients 8 years or older with Stage 2 T1D, according to the announcement.

Approximately 65,000 people are diagnosed with Stage 3 T1D annually. Using its own expertise in treating the disease, Sanofi said it will continue to maximize TZIELD’s potential.

“Any additional indications, approvals and pipeline assets only serve to further our excitement. Given our existing partnership and complementary work in the diabetes and immunology spaces, we foresee a seamless integration and execution,” Charmeil added.

According to the announcement, Provention Bio also adds certain early-development pipeline assets in immune-mediated diseases.

In a statement, Provention Bio CEO and co-founder Ashleigh Palmer said the company and Sanofi “share a common vision of bringing new therapies to patients with autoimmune diseases,” pointing to the success the parties have experienced thus far as as collaborators.

“Under our co-promotion agreement, our companies have made significant progress educating health care providers and increasing patient access during the initial U.S. commercial launch of TZIELD,” Palmer continued. “Sanofi’s global expertise and commitment to immunology makes them an ideal acquiror and positions our innovative therapy to reach more patients as quickly as possible.”

Following news of the deal, which Sanofi expects to close in the second quarter of this year, Provention Bio’s stock jumped approximately 260% to $24.16 in pre-market trading on March 13.

Under the terms, Sanofi will commence a cash tender offer to acquire all outstanding shares of Provention Bio for $25 per share. The deal is subject to customary closing conditions, including the tender of a number of shares of Provention Bio common stock that – together with shares already owned by the acquiring company and its affiliates – represents at least a majority of outstanding shares of the target; the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Acts of 1976; and other customary conditions.

If and when the tender offer is completed, a wholly owned subsidiary of Sanofi will merge with and into Provention Bio and all of the outstanding shares of that company that are not tendered will be converted into the right to receive the same $25 per share in cash that was offered to Provention Bio shareholders in the tender offer.

Sanofi said it plans to close the deal with available cash resources.

Recently it was announced that company will move its U.S. base in Bridgewater to Morristown. The news came about a year after the sale of Sanofi’s current Somerset County property, which it still occupies, to a California investment firm for $260.65 million. At the time, CBRE identified the deal as the largest single tenant transaction in the state since 2016.

PJT Partners serves as exclusive financial advisor to Sanofi and Weil, Gotshal & Manges LLP is acting as its legal counsel. BofA Securities Inc. and Centerview Partners LLC are providing financial advice to Provention Bio, with Ropes & Gray LLP acting as counsel.