Sanofi is getting into the liver disease treatment space with its $1.7 billion acquisition of Inhibrx. But while the biotech stock jumped Tuesday, shares of Sanofi toppled.
Inhibrx has a treatment in midstage testing for alpha-1 antitrypsin deficiency, an inherited disease in which low levels of a key protein cause lung tissue to deteriorate. The company believes its drug could reduce inflammation in the lungs and prevent further deterioration.
The acquisition focuses on Inhibrx's alpha-1 antitrypsin deficiency treatment, known as INBRX-101. Other assets will be spun off into a new company currently called New Inhibrx.
"The addition of INBRX-101 as a high potential asset to our rare disease portfolio reinforces our strategy to commit to differentiated and potential best-in-class products," Sanofi's Houman Ashrafian said in a written statement. Ashrafian is Sanofi's head of research and development.
On today's stock market, Inhibrx shares popped 8.9% to 36.30. The biotech stock neared a recent high of 39.50, soaring more than 176% over two months. But Sanofi stock fell 1.9% to 49.89.
Highly Rated Biotech Stock
Under terms of the deal, Sanofi will pay $30 per share of Inhibrx stock. The biotech stock closed at 33.33 on Monday.
Sanofi's deal also includes a contingent value right worth $5 per share and 0.25 shares of New Inhibrx. The CVR is tied to a regulatory milestone and would add $296 million to the total value of the deal. Sanofi will also receive an 8% equity stake in New Inhibrx.
The companies expect the deal to close in the second quarter.
Biotech stock Inhibrx is highly rated with an IBD Digital Relative Strength Rating of 97, meaning its 12-month performance ranks in the top 3% of all stocks.
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