Frexalimab

Sanofi has agreed to spend $470 million to take control of a young biotechnology company and its experimental drug for Alzheimers disease.The newly announced acquisition has Sanofi paying $8 for each share of Vigil Neuroscience it doesnt already own, reflecting a premium of nearly 250% to the price Vigil shares traded at Wednesday afternoon. The French pharmaceutical giant invested $40 million into Vigil last June, and in exchange got an exclusive right to be first in line for deal talks if Vigil chose to license out its platform of small molecule drugs that amplify a protein called TREM2.The most advanced of those drugs, code-named VG-3927, several months ago completed an early-stage study that enrolled both healthy volunteers and patients with Alzheimers disease. Vigils president and CEO, Ivana Magovevi-Liebisch, said in a statement that the acquisition should help fully unlock and accelerate the development of VG-3927.A second molecule from the platform, VGL101, is not being acquired by Sanofi.Instead, rights to that molecule will be returned to the original licensor, Amgen.Neuroscience is one of Sanofis core strategic research focuses, alongside cancer, rare diseases and the immune system. Yet, in terms of product sales, it pales in comparison to those other three areas. Sanofis portfolio lists just one neurology drug, the multiple sclerosis therapy Aubagio, which last year accounted for less than 1% of the 41 billion euros in net sales recorded by the companys biopharma unit.Sanofi is trying to grow this pool with a few experimental medicines that have progressed to the later stages of development. One, frexalimab, is what Sanofi touts as a pipeline-in-a-product asset, since the company believes it has the potential to treat a range of illnesses, from MS to lupus to diabetes. Another, riliprubart, is being evaluated against CIPD, a rare disorder that harms the peripheral nerves, leading to arm and leg weakness.A third, tolebrutinib, has been tested across different types of MS and is currently being considered for approval by Food and Drug Administration, with a decision deadline set for late September. Sanofi got ahold of tolebrutinib through its $3.7 billion purchase of Principia Biopharma in 2020.Notably, all of these medicines work by regulating the immune system, which is characteristic of Sanofis approach to neurology.The Vigil deal follows this approach, too, as TREM2 alerts the brains resident immune cells to threats like the toxic abeta plaques that are a hallmark of Alzheimers. When this protein is impaired or loses its function, it can increase the risk of nerve cell injury, inflammation and death.TREM2 represents a compelling target at the intersection of immune dysregulation and neurodegeneration, said Houman Ashrafian, Sanofis head of R&D, in that Wednesday statement.The acquisition also supports Sanofis strategy of leveraging our expertise in immunology to solve health problems with critical unmet need, Ashrafian added.The companies expect their deal to close sometime between July and the end of September, provided investors holding a majority of the outstanding shares of Vigil common stock approve it. Sanofi said Magovevi-Liebisch as well as Vigil backers Atlas Venture and Bruce Booth, a partner at the firm have signed voting and support agreements in favor of the deal.Together, they represent roughly 16.2% of Vigils total common shares outstanding.In addition to the upfront payment, Vigils shareholders will receive a so-called contingent value right that would entitle them to receive a deferred cash payment of $2 for each share they own once VG-3927 has its first commercial sale.“We believe this is a good outcome for shareholders in the current funding environment,“ wrote Myles Minter, an analyst at William Blair who covers Vigil, in a note to clients.Vigil debuted at $14 per share when it went public in January 2022, but has lost most of its market value since.In his own note, Stifel analyst Paul Matteis argued the timing of the deal is “interesting,“ given a TREM2-targeting drug from Alector and AbbVie recently failed in a mid-stage study. That setback “significantly diminished enthusiasm for the target,“ according to Matteis, so while there were reasons to think Vigil's drug could fare better, “it was going to be hard to have conviction in this until we saw [Phase 2] data.“ '