Alnylam Pharmaceuticals Inc. jumped the most in almost 18 months after Sanofi agreed to pay $700 million for access to rare-disease treatments and a 12 percent stake in the biotechnology company.
Alnylam rose 41 percent to $93.28 at the close in New York, the biggest single-day gain since July 2012 and its highest value since the Cambridge, Massachusetts-based company first offered shares to the public in May 2004.
Sanofi’s Genzyme unit will gain greater access to Alnylam’s patisiran, a therapy for a life-threatening illness that damages the nervous system, as well as the rights to three other drugs, Paris-based Sanofi said in a statement. The French drugmaker also gets an option on all of Alnylam’s medicines for rare genetic diseases.
“The one thing that Sanofi clearly needs to work on is its pipeline, so strategically it makes sense to me,” said Michael Leuchten, an analyst with Barclays Plc in London.
The deal builds on Sanofi’s $20.1 billion 2011 acquisition of Genzyme, which ranked as the world’s biggest maker of treatments for rare diseases. The market for such drugs is forecast to grow at twice the pace of the pharmaceutical industry to $127 billion by 2018 from $83 billion in 2012, according to market-researcher Evaluate Ltd.
France’s biggest drugmaker also today revised its agreement with Regeneron Pharmaceuticals Inc., its U.S. partner on the cancer treatment Zaltrap, gaining the right to nominate an independent director when Sanofi accumulates a 20 percent stake. Sanofi, which owns about 16 percent of Regeneron, retains the ability to buy as much as 30 percent of the company.
Regeneron fell 2.1 percent to $268.68 in New York. Sanofi fell 1.1 percent to 73.20 euros in Paris.
Sanofi is buying the Alnylam stake for about $80 a share, a 21 percent premium over Alnylam’s closing share price of $66.21 on Jan. 10. The boards of both companies approved the transaction, according to Sanofi.
Alnylam, which had revenue of $67 million in 2012 and has no products on the market, may garner sales of $1 billion by 2020, according to by Marko Kozul, an analyst at Leerink Partners.
Alnylam’s experimental products are designed to interfere with ribonucleic acid, or RNA, by switching off the genes responsible for over-producing proteins that cause certain diseases.
Sanofi and Alnylam in 2012 formed a partnership to develop and market patisiran, an experimental treatment for the life-threatening ailment known as transthyretin-familial amyloid polyneuropathy, in Japan and the Asia-Pacific region, where the disease is disproportionately common. Under the new deal, Sanofi will sell the drug in all markets outside North America and Western Europe, the company said in the statement.
“Rare diseases is an area that’s attractive to pretty much everybody for the right reasons, because you get high prices, you tend not to have that much headwinds in terms of reimbursements,” said Leuchten of Barclays.
Separately, Alnylam said it will pay $25 million in cash and $150 million in stock for Merck & Co.’s Sirna Therapeutics unit. Sirna, like Alnylam, is involved in developing RNA-interference technology.