Ever since the Federal Trade Commission (FTC) unveiled its campaign to take a closer look at biopharma’s M&A strategies, the industry’s dealmakers have been on high alert. While deals have so far gone through without hiccups, Sanofi and Translate Bio are refiling paperwork on their $3.2 billion merger to give the agency more time to review.
In a Securities and Exchange Commission filing, Translate Bio said that after discussion with the FTC, Sanofi withdrew and refiled its proposed buyout “in order to provide the FTC with additional time to review the proposed acquisition and information recently provided to them.” Sanofi and Translate Bio struck the buyout deal in early August, and the companies refiled their paperwork Aug. 27 after Sanofi and the FTC held “informal discussions,” the filing says.
The companies “continue to expect to complete the transaction” subject to any FTC requirements, Translate’s filing says.
The news comes shortly after online news service Dealreporter, citing two antitrust lawyers, said the deal is likely to face an FTC probe because of the existing partnerships and licensing deals between the companies.
Sanofi and Translate Bio first teamed up on the biotech’s mRNA tech back in 2018. At the time, Sanofi paid $45 million to start a three-year partnership that would focus on up to five infectious diseases. Since then, the COVID-19 pandemic has pushed mRNA tech into the global spotlight, and successful vaccines from Moderna and Pfizer-BioNTech are rolling out across the world and generating tens of billions of dollars.
As a leading vaccine player, Sanofi opted to up the ante with Translate Bio last June, spending $425 million to expand the deal “across all infectious disease areas.” Then, little more than a year later, in August 2021, Sanofi and Translate penned their buyout.
Still, it remains to be seen whether the FTC will throw up any roadblocks to the proposed deal. Earlier this year, the agency said it’d work with other competition regulators around the world to closely probe biopharma deals.
The FTC’s campaign came in the wake of megadeals between Bristol Myers Squibb and Celgene, AbbVie and Allergan as well as Pfizer’s Upjohn unit and Mylan. Speaking with reporters in March, then-acting FTC chair Rebecca Kelly Slaughter said “skyrocketing” drug costs and allegations of anti-competitive conduct in biopharma made it “imperative” that the FTC “rethink our approach.” The agency planned an “aggressive” approach toward anti-competitive deals in biopharma, she said.
While the FTC promised a closer look at biopharma’s deals, some transactions have closed since then. Notably, AstraZeneca’s $39 billion buyout of rare disease drugmaker Alexion closed without issue in July.