News that Sanofi had started buying up $500 million-worth of shares in partner Regeneron prompted speculation of a possible hostile bid yesterday, despite the French drugmaker's pleas to the contrary.
Sanofi announced its intention to boost its stake in the US biopharma company in a statement to the US Federal Trade Commission beyond its current stake of around 16% to around 30%, which is the maximum holding it can take in Regeneron under the terms of their collaboration.
The rumour mill immediately started to grind out speculation that Sanofi may be gearing up for a takeover of its long-term R&D partner, although Regeneron's high market capitalisation of more than $16 billion has been perceived as a block to any such deal in recent years.
Some observers suggested however that the move was likely an affirmation of the strength of Regeneron's pipeline and simply a means for Sanofi of investing cash on hand. Shares in the US biotech have climbed around two-thirds in the last 12 months and could benefit from a stream of positive news-flow throughout 2013 and 2014.
The two companies have been working together for 10 years and scored their first commercial success last year when the FDA gave the go-ahead to their Zaltrap (ziv-aflibercept) product for colorectal cancer.
They are also ushering a novel cholesterol treatment - a subcutaneous fully-human antibody targeting PCSK9 called SAR236553/REGN727 - through a Phase III trials programme. Meanwhile, other joint projects include rheumatoid arthritis candidate sarilumab - also in Phase III - and earlier-stage candidates for osteoarthritis, asthma and dermatitis, and various cancers.
With Sanofi already funding the development expenses of these projects in return for a share of profits, it could make sense to bring the shared pipeline in-house, although it would have to pay a hefty price to claim ownership.
Regeneron said in a statement that the 30% cap on Sanofi's ownership remains in effect "unless otherwise terminated".