May 25, 2020 / 5:15 PM / 2 months ago

Regeneron to buy back $5 billion stake held by Sanofi

FILE PHOTO: The logo of Sanofi is seen at the company's headquarters in Paris, France, April 24, 2020. REUTERS/Charles Platiau/File Photo

(Reuters) - U.S. drugmaker Regeneron Pharmaceuticals said on Monday it would repurchase about $5 billion of its shares directly from France’s Sanofi, without altering their over-a-decade-long partnership.

Sanofi, which owns some 23.2 million shares of Regeneron’s common stock or about a 20.6% stake, said it would continue to own about 400,000 Regeneron shares to support the collaboration.

The drugmakers’ collaboration dates back to 2003 and has resulted in five approved treatments to date - including eczema drug Dupixent - with additional candidates in clinical development. Sanofi originally purchased a stake in Regeneron in 2004.

Sanofi’s Chief Executive Officer Paul Hudson said the sale would help the company “execute on our strategy to drive innovation and growth.”

“Sanofi remains committed to continuing our collaboration with Regeneron which remains an integral part of our overall strategy.”

In their latest move, Regeneron is testing its rheumatoid arthritis drug, Kevzara, with partner Sanofi in only those considered critically ill with COVID-19 and has also identified hundreds of antibodies that could treat or prevent the coronavirus.

Regeneron said it would fund the purchase with a combination of $3.5 billion of cash on hand and $1.5 billion of financing.

The public offering will occur simultaneously in the United States and internationally through underwriters led by BofA Securities and Goldman Sachs as joint book-running managers, the companies said.

Reporting by Nivedita Balu in Bengaluru, Editing by Franklin Paul

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