Born From Frozen Camel Blood, Ablynx Is $4.8 Billion Prize

It began almost three decades ago with a container of frozen camel blood in Belgium, took a detour through Morocco and progressed to a stock listing in New York last year. The latest chapter in Ablynx NV’s story: a takeover worth about $4.8 billion.

The biotech company -- which Monday agreed to a bid from France’s Sanofi, snubbing a lower offer from Danish diabetes-drug maker Novo Nordisk A/S -- stemmed from an accidental discovery. A group of students at the Free University of Brussels in the late 1980s needed animal tissue for a project and found a sample of camel blood in the freezer, said Serge Muyldermans, a researcher who helped found Ablynx.

Muyldermans and his colleagues noticed something unusual that sparked their curiosity. The animal’s immune-system proteins were noticeably simpler and smaller -- and therefore able to squeeze into tighter spots -- than the human version. Yet as the group zeroed in on the antibodies of camels and llamas, few of their peers took them seriously, Muyldermans recalled.

“Instead of going to animals closer to humans, we went to animals further away,” said the scientist, who still owns a small number of shares and isn’t involved in running Ablynx. “In the beginning, people were laughing at us.”

Uncle’s Camel

Determined to continue their studies, the researchers found a Moroccan university willing to procure a camel, Muyldermans said. When that animal inexplicably disappeared, a lab worker in Belgium who had ties to the North African country began traveling back and forth, bringing samples from an uncle’s camel, he said.

The persistence paid off when Ablynx engineered a new kind of antibody treatment, called nanobodies. Based on a discovery by Raymond Hamers, then a Free University professor, nanobodies are just one-tenth the size of the human protein. Formed in 2001, the biotech is awaiting approval to launch its first product, a treatment for a rare bleeding disorder. 

Since October, when Ablynx published results of a late-stage clinical trial, the shares have tripled, closing at 37.12 euros Friday in Brussels. The company burst into the limelight earlier this month when Novo went public with an offer of 28 euros a share in cash upfront and potential additional payments of as much as 2.50 euros a share, which Ablynx refused. On Monday, the Belgian company agreed to bid of 45 euros from Sanofi.

Sweetening Bid

Van Herk Investments, the target’s top owner with more than 10 percent of the stock, said the nanobody technology deserved more than Novo’s bid.

“The concept is very innovative,” Dharminder Chahal, a biotech adviser to Van Herk, said in an interview this month. “It’s a platform also that has the promise of delivering a whole line of new drugs.”

Novo was preparing a sweetened bid, Bloomberg reported Friday, citing people with knowledge of the matter. Meanwhile, Ablynx reached out to other potential suitors including Sanofi, Roche Holding AG and U.S.-based Merck & Co. to gauge interest, the people said.

Ablynx is aiming nanobodies at a range of conditions including inflammation, respiratory disorders and cancer. Its lead drug candidate is caplacizumab, developed to treat a rare and life-threatening disorder called acquired thrombotic thrombocytopenic purpura. The disease causes clots to form in small vessels that can block blood flow to the brain and heart, according to the U.S. National Heart, Lung and Blood Institute.

About 7,500 people are struck annually in North America, Europe and Japan, according to Ablynx. Untreated, the condition kills about 90 percent of patients. The current therapy, a form of blood exchange, can reduce the death rate to less than 20 percent.

The recent surge in Ablynx’s stock began when the Ghent, Belgium-based company released results in October from a clinical trial called Hercules showing that caplacizumab, when added to standard therapy, was superior to the conventional approach alone, with an overall reduction in deaths related to purpura, recurrences and clots. Novo has said it began bidding for the biotech in early December.

Sanofi ultimately distinguished itself with an interest that went well beyond Ablynx’s main treatment, while Novo seemed focused on caplacizumab, Ablynx CEO Edwin Moses said in an interview Monday. After meeting with Sanofi at a conference in San Francisco earlier this month, Ablynx delivered a five-hour presentation in Paris in the past week to CEO Olivier Brandicourt and his team. The final details were hammered out over the weekend, Moses said.

“This nanobody platform is in very safe hands with someone who recognizes the wide applicability of the technology,” Moses said.

Ablynx has a range of partnerships with companies including Novo, Sanofi, Novartis and Merck, and has opened an office in Philadelphia to lead the roll-out of caplacizumab. The company has filed for approval in the EU and said it intends to file in the U.S.

Biggest-Ever Purchase

Ablynx fits well within Sanofi, which has already made significant investments in Belgium, and strengthens its platform for expansion in rare blood diseases, Brandicourt said Monday. Sanofi should be able to accelerate development of the biotech company’s pipeline, he said.

Ablynx would have been Novo’s biggest-ever purchase, and would have strengthened a relatively small unit that sells medicines for blood disorders. Bernstein valued caplacizumab at as much as 3.2 billion euros, with even modest success in other assets adding 1.3 billion euros. Ablynx, which went public in 2007 in Brussels, raised $230 million in October in a U.S. share sale.

Muyldermans said before the Sanofi deal was announced that he wouldn’t be surprised if Ablynx, born by chance from a Belgian freezer, were sold. 

“If you’re growing, sooner or later you are going to be taken over by a larger company,” he said. “As long as they pay a good price, it’s fine.”