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How Sanofi Can Benefit from Ablynx Acquisition

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Acquisition deal

On January 29, 2018, Sanofi entered an agreement with Ablynx where Sanofi will acquire all of the outstanding ordinary shares of Ablynx including American depositary shares (or ADSs), warrants, and convertible bonds. Sanofi will acquire Ablynx by purchasing Albynx’s share at a price of 45 euros per share in cash, which is equivalent to an equity value of approximately 3.9 billion euros.

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Sanofi’s strategy

Ablynx is a biopharmaceutical company that specializes in the development of Nanobodies. Nanobodies are a new class of next-generation biologicals. Ablynx has 45 proprietary and partnered new molecules in a wide range of therapeutic areas such as hematology, immune-oncology, inflammation, and respiratory disorders. Currently, eight novel molecules have entered clinical development phases.

Ablynx’s caplacizumab, an anti-vWF nanobody, is in the advanced stages of clinical trial. Caplacizumab is being evaluated for the treatment of individuals with acquired thrombotic thrombocytopenic purpura (or aTTP). The company has filed an application for caplacizumab with the European Union regulatory authorities. Ablynx anticipates filing applications to the regulatory authority in the US over the first half of 2018. If approved, caplacizumab will be the first-in-class therapy for the treatment of aTTP.

ALX-0171, another Albynx nanobody, is presently in phase 2b of a clinical trial with a potential for symptomatic treatment of individuals with RSV (respiratory syncytial virus) infections. The acquisition of Ablynx could strengthen Sanofi’s rare blood disorder platform.

Analyst recommendations for Sanofi and its peers in January 2018

Of the three analysts tracking Sanofi (SNY) in January 2018, one analyst recommended a “strong buy,” while two analysts recommended a “hold.” On January 31, 2018, Sanofi had a consensus 12-month target price of $49.5, which represents a ~10.7% return on investment over the next 12 months.

One analyst tracking Novo Nordisk (NVO) in January 2018 recommended a ”strong buy.” On January 31, 2018, Novo Nordisk had a consensus 12-month target price of $60.4, which represents a ~6.9% return on investment over the next 12 months.

Of the four analysts tracking GlaxoSmithKline (GSK) in January 2018, one analyst recommended a “strong buy,” while three analysts recommended a “hold.” On January 31, 2018, GlaxoSmithKline had a consensus 12-month target price of $39.05, which represents a ~2.0% return on investment over the next 12 months.

Of the five analysts tracking AstraZeneca (AZN) in January 2018, three analysts recommended a “strong buy,” while one analyst recommended a “buy,” and one analyst recommended a “hold.” On January 31, 2018, AstraZeneca had a consensus 12-month target price of $38.82, which represents a ~8.8% return on investment over the next 12 months.

The PowerShares International Dividend Achievers Portfolio (PID) invests ~1.4% of its total portfolio holding in Sanofi.

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