Regeneron Shares Fall Premarket as Sanofi Signals Possible Stake Sale
10 December 2019 - 11:52PM
Dow Jones News
By Colin Kellaher
Shares of Regeneron Pharmaceuticals Inc. (REGN) slipped more
than 3% in premarket trading Tuesday after French partner Sanofi SA
(SAN.FR) indicated it would explore the sale of all or part of its
roughly 21.6% stake in the biotechnology company.
Sanofi, which holds about 23.4 million Regeneron shares, said in
a filing with the Securities and Exchange Commission that it could
begin selling off its stake upon expiration of the lock-up term of
the investment agreement between the companies, which begins in
December 2020.
The French drug maker said it could also use the shares as
collateral.
Sanofi on Monday said it would stop investing in research into
diabetes and cardiovascular diseases as part of a broader strategic
overhaul and announced a $2.5 billion deal to buy cancer biotech
Synthorx Inc. (THOR).
Analysts at Citigroup said they view Sanofi's SEC filing as "a
statement of optionality, not a statement of intent or sale," and
they noted that Sanofi would need five years to fully exit its
Regeneron stake under the lock-up.
The analysts also said Regeneron could buy back part of the
stake. The Tarrytown, N.Y., company last month said its board
approved a $1 billion share-repurchase program.
Regeneron created the eczema and asthma treatment Dupixent and
markets it jointly in the U.S. with Sanofi under a 2007
collaboration agreement. Sanofi markets the product
internationally.
Paul Hudson, Sanofi's new chief executive, on Monday said
Dupixent "has the chance to be one of the most successful medicines
in the history of the industry."
Regeneron shares, which closed Monday at $365.63, were down
3.7%, to $352, in premarket trading Tuesday.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
December 10, 2019 07:37 ET (12:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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