Pegenzileukin

Sanofi is likely to increase its M&A this year since it has more cash in its pockets, as the French pharma also monitors China as a possible source of new drug innovation, CFO François Roger said during a media call Thursday morning. “We have always been very active in the M&A space. We may be a bit more in the near future due to the fact that we have a strong balance sheet,” Roger said. In a separate media call, CEO Paul Hudson said Sanofi would likely target preclinical and Phase 1 assets because it already has a robust late-stage pipeline. Roger added Sanofi would prefer to focus on assets worth between €2 billion and €5 billion. It’s been more than a year since Hudson announced Sanofi’s strategic shift to become a pure-play biopharma company. Now, Roger said that it is going to receive a significant amount of cash following its plans to relinquish the controlling stake in its consumer health unit Opella. This deal could close in the second quarter at the earliest. That transaction is estimated to be worth in the high single-digits in billions of euros, which means Sanofi can move “relatively quickly” on potential new deals, Roger said. Further, Sanofi’s debt position is “relatively low,” which would allow it to make such deals, he said. Because Sanofi is established in autoimmune disease, it could add more dermatology, respiratory, gastroenterology or rheumatology candidates into its pipeline, Hudson said: “That allows us to bring breakthrough science at a low marginal cost once it’s launched, because we have the people in place to do the job properly, and we have an incredible reputation.” The rare disease space is also attractive. In retrospect, Hudson said he would’ve liked to add more such assets to its portfolio in the past few years since the company has the capability, and this would offer the unit more breakthroughs on top of what’s being done internally. Sanofi is also interested in vaccines and neurology, he added. Sanofi will remain open-minded about other disease areas but it won’t be as efficient. “It takes a lot to push yourself in an area where you have no expertise,” Hudson said. Nonetheless, Roger said the company “doesn’t feel any pressure to go crazy on M&A” and would be “very disciplined.” He said it would “reward its shareholders first” with plans announced Thursday for a share buyback program this year worth €5 billion. As for China, Sanofi views the country as not only a source of revenue (it is the company’s second largest market), but also as a key source of innovation. Roger pointed out that more than 20% of new molecular entities come from China, so “this is not something that we can neglect.” One key decision Sanofi will have to make if it is to invest in China is whether such deals would be focused on the Chinese market alone or have utility outside the country as well, Roger said. In December, the company announced it is spending about €1 billion for a new insulin facility in Beijing for the Chinese market and neighboring countries. Elsewhere, Sanofi said that Beyfortus has reached blockbuster status, with €1.7 billion in sales in its first year in the market. The infant RSV antibody, which it co-developed with AstraZeneca, had steady growth in the past quarters after having to address supply issues early last year. While there is more growth to be had in 2025 by entering new geographies and increasing uptake rates, Roger said the rise in Beyfortus revenue this year might “not be to the same extent” as last year. Merck’s own antibody challenger in RSV could enter the market in 2025. Roger noted that Sanofi “welcomes competition,” but also pointed to the key differences between the two assets. The drugmaker also said Thursday that it axed four programs, including a Phase 3 study of its BTK inhibitor tolebrutinib in relapsing multiple sclerosis. Sanofi obtained the drug in 2020 as part of its $3.7 billion acquisition of Principia Biopharma and it’s still being advanced for other forms of MS . Other assets on the chopping block included a Phase 1 candidate called pegenzileukin that targets IL-2 for cancer and a T cell engager dubbed SAR444200 in early development for solid tumors. Sanofi also discontinued SAR445611, a monoclonal antibody that was in Phase 1 development for inflammation. Additional reporting by Ayisha Sharma.

Sanofi’s work with engineered cytokines has stumbled in the clinic, but the company isn’t throwing in the towel yet on such therapies, which hold potential for treating autoimmune diseases and cancer. The French pharmaceutical giant is now partnering with a clinical-stage startup whose technologies for engineering these protein therapies could avoid limitations that have stymied some research efforts. Per deal terms announced Monday, Sanofi is paying Synthekine $40 million up front. Depending on the progress of the research, Menlo Park, California-based Synthekine will be eligible for an unspecified sum in milestone payments. Cytokines are signaling proteins that modulate immune responses. While these proteins are already in our bodies, leveraging them for therapeutic effect presents challenges. A cytokine’s effects can vary on different types of cells or even on the same cell types. Cytokine therapies can also spark broad responses that have toxic effects. The Sanofi partnership is focused on one particular cytokine called interleukin-10, or IL-10. While this cytokine has drawn research interest for potential immunosuppressive applications, dose-limiting toxicity has been a problem. Synthekine’s version of IL-10 is engineered to dial out the protein’s immunostimulatory effects, which the company says separates the drug’s therapeutic efficacy from potential toxic effects. The inflammatory disease targets for the partnered research were not disclosed. But the deal calls for Synthekine and Sanofi to work together up to a defined but undisclosed point of preclinical development. After that, Sanofi will take responsibility for developing the IL-10 therapeutic candidates. The companies said the collaboration will focus on using Synthekine’s technologies to optimize IL-10 with the goal of developing drugs that are more selective to their targets while offering a wider therapeutic index, the dose range that balances safety and efficacy. “We look forward to working with Synthekine, a leader in targeted cytokine engineering with outstanding technologies and scientific team,” John Bertin, global head of inflammation and immunology research at Sanofi, said in a prepared statement. “IL-10 plays a key role in immune regulation, and this collaboration aimed at developing precisely tailored IL-10 therapies reaffirms our commitment to deliver the next wave of novel therapies to treat inflammatory diseases.” Sanofi previously placed a big bet on cytokines when it acquired engineered cytokines developer Synthorx for $2.5 billion in 2019. Synthorx’s lead program was an IL-2 therapy in development for cancers and autoimmune diseases. In 2022, Sanofi disclosed Phase 2 results showing this cytokine therapy did not achieve the desired efficacy. No safety issues were reported for the therapy, which now bears the name pegenzileukin. But the disappointing results led the company to return the therapy to early-stage testing to sort out what it described as dosing issues. Sanofi aims to develop this therapy for treating solid tumors. Lack of efficacy was also cited in the disappointing clinical trial outcomes for bempegaldesleukin, an IL-2 therapy that Nektar Therapeutics was developing in partnership with Bristol Myers Squibb. In 2022, this therapy ran into successive failures, first in a Phase 3 test in melanoma and then two Phase 2 trials in kidney and bladder cancers. The mid-stage failures led to the end of the alliance, which began in 2018 with a $1.8 billion financial commitment from BMS. Synthekine has another big pharma research partner. In 2021, Merck and Synthekine struck up an alliance on the development of cytokine drugs for two autoimmune and inflammation targets that remain undisclosed. The sum of the upfront payment was also not disclosed, but Merck is providing Synthekine with research funding and the startup could earn up to $525 million in milestone payments. Synthekine’s internal pipeline is led by an IL-12 therapy currently in Phase 1 testing for cancer. The startup last raised money in 2023, a $100 million Series C round of financing.