Sanofi agrees $2.2bn Inhibrx deal

BY Richard Summerfield

In a deal that will expand its rare disease pipeline, French pharmaceutical company Sanofi has agreed to acquire Inhibrx, Inc for $2.2bn.

The transaction will give Sanofi access to Inhibrx’s INBRX-101 – an experimental treatment for a rare genetic disease – which is currently in the second of three phases of clinical trials. Its other experimental drugs will be spun off into a separate company, with Sanofi retaining an 8 percent stake. The spun-off company will operate under the Inhibrx name and be led by current Inhibrx chief executive Mark Lappe, who will become chairman and chief executive.

Sanofi expects to finance the transaction with available cash resources. Subject to the satisfaction of customary closing conditions, Sanofi and Inhibrx expect the transaction to close in the second quarter of 2024.

Under the terms of the deal, Inhibrx shareholders will receive $30 per share, below its $33.33 closing price on Monday 22 January, the day before the deal was announced. Inhibrx shareholders will also gain stakes in the new biotech, plus the chance to receive a further $5 a share if a regulatory milestone is met. As part of the transaction, Sanofi will assume and retire Inhibrx’s outstanding third-party debts, and fund the spun-off company with $200m in cash.

“The addition of INBRX-101 as a high potential asset to our rare disease portfolio reinforces our strategy to commit to differentiated and potential best-in-class products,” said Houman Ashrafian, head of research and development at Sanofi. “With our expertise in rare diseases and growing presence in immune-mediated respiratory conditions, INBRX-101 will complement our approach to deploy R&D efforts in key areas of focus and address the needs of the underserved AATD patients and communities.”

INBRX-101 is designed to treat AATD, a disease that progressively damages the lungs and liver, by reducing inflammation and staving off further damage to the tissue. The size of the AATD market is expected to grow considerably in the coming years, with many other biotech companies, including Mereo BioPharma, Vertex, Wave Life Sciences, BioMarin, Intellia Therapeutics and Peak Bio, all believed to be pursuing AATD therapies.

Sanofi has been particularly active in recent months. In late 2023, the company and artificial intelligence (AI) specialist Aqemia entered a multi-year research collaboration worth $140m to discover small molecule drug candidates across several therapeutic areas. Sanofi also entered into a partnership with BioMap, another AI specialist, to accelerate drug discovery for biotherapeutics, in a deal potentially worth over $1bn. Furthermore, in March 2023 Sanofi acquired Provention Bio for $2.9bn.

News: France's Sanofi to buy U.S. drugs project INBRX-101 for about $2.2 billion

Synopsys to acquire Ansys in $35bn mega-deal

BY Fraser Tennant

In the largest technology acquisition in over a year, electronic design automation (EDA) company Synopsys is to acquire engineering simulation leader Ansys in a transaction with an enterprise value of approximately $35bn.

Under the terms of the definitive agreement, Ansys shareholders will receive $197 in cash and 0.3450 shares of Synopsys common stock for each Ansys share. Ansys shareholders are expected to own approximately 16.5 percent of the combined company on a pro forma basis.

Upon completion of the transaction, Synopsys’ pioneering semiconductor electronic design automation (EDA) and Ansys’ broad simulation and analysis portfolio will create a leader in silicon to systems design solutions.

“The megatrends of artificial intelligence, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity,” said Sassine Ghazi, president and chief executive of Synopsys. “Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation.”

According to both companies, this combination brings together their highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products.

“This acquisition will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys’ traditional customers,” said Ajei Gopal, president and chief executive of Ansys.

The combined company expects to achieve approximately $400m of run-rate cost synergies by year three post-closing and approximately $400m of run-rate revenue synergies by year four post-closing, growing to more than approximately $1bn annually in the longer-term.

The transaction is anticipated to close in the first half of 2025, subject to approval by Ansys shareholders, the receipt of required regulatory approvals and other customary closing conditions.

Mr Ghazi concluded: “This acquisition is the logical next step for our successful, seven-year partnership with Ansys and we look forward to working closely with the Ansys team to realise the benefits of this combination for our customers, shareholders and employees.”

News: Synopsys to buy engineering software firm Ansys in $35 billion deal

Talos announces $1.29bn QuarterNorth deal

BY Richard Summerfield

Talos Energy has agreed to acquire QuarterNorth Energy in a $1.29bn cash and stock deal. QuarterNorth is a privately-held US Gulf of Mexico exploration and production company with ownership in several prolific offshore fields. Talos expects the deal to improve its base decline rate by approximately 20 percent.

Under the terms of the deal, QuarterNorth Energy will receive about 24.8 million shares of Talos’s common stock and around $965m in cash. The board of directors of both Talos and QuarterNorth have unanimously approved the deal, which is expected to close by the end of the first quarter of 2024, subject to certain customary closing conditions and regulatory approvals.

The deal will offer a significant boost to Talos’s operations in the Gulf of Mexico. QuarterNorth’s assets include six major fields in the region, predominantly in deep water. According to Talos, the acquisition will add production of about 30,000 barrels of oil equivalent per day (boe/d) expected for the full year 2024, averaging about 75 percent oil from approximately 95 percent operated assets proved reserves of around 69 million boe with a PV-10 of $1.7bn, high margin, low decline production, with low reinvestment rate requirements to sustain production and no meaningful near-term asset retirement obligations conducive to long-term high free cash flow generation.

“Today’s announcement marks one of Talos’s most significant milestones as we build a large-scale offshore exploration and production company,” said Timothy S. Duncan, president and chief executive of Talos. “The addition of QuarterNorth’s overlapping deepwater portfolio with valuable operated infrastructure will increase Talos’s operational breadth and production profile while enhancing our margins and cash flow. This Transaction aligns with Talos’s overall strategy of leveraging existing infrastructure and complementary acreage to accelerate shareholder value creation.

“The pro forma footprint in the U.S. Gulf of Mexico should allow us to capture meaningful operating synergies,” he continued. “The expected financing structure of the Transaction accelerates de-leveraging, immediately improves our credit profile, is accretive on key metrics, and positions us to consider additional capital return initiatives following deleveraging in the near term. We look forward to completing this Transaction in the next few months and continuing our strategy of building a large-scale, diverse energy company.”

News: Talos Energy to acquire QuarterNorth Energy for $1.29 bln

GSK to acquire Aiolos Bio for $1.4bn

BY Richard Summerfield

In a deal that will bolster its respiratory biologics portfolio, British pharmaceutical firm GSK has agreed to acquire the asthma drug specialist Aiolos Bio in a deal worth up to $1.4bn.

Under the terms of the deal, GSK will pay $1bn upfront to acquire Anglo-American biopharma firm Aiolos, and up to $400m in certain success-based regulatory milestone payments, as well as tiered royalties owed to Jiangsu Hengrui Pharmaceuticals Co., Ltd., which exclusively licensed Aiolos’ AIO-001, a potentially best-in-class, long-acting antithymic stromal lymphopoietin (TSLP) monoclonal antibody which is ready to enter phase 2 clinical development for the treatment of adult patients with asthma, with potential for additional indications including chronic rhinosinusitis with nasal polyps.

The companies did not reveal when the deal is expected to close, though it is contingent on customary conditions, including applicable regulatory agency clearances under the Hart-Scott-Rodino Act in the US.

In addition to reaching a bigger population of asthma patients, GSK said AIO-001 has the potential to “redefine” the standard-of-care as it can be administered every six months. Respiratory medicines and vaccines generated around $14bn in sales for GSK in 2022.

“We have a proud heritage and deep development expertise in respiratory medicines, especially addressing diseases driven by IL-5 with high levels of eosinophils or high T2 inflammation,” said Tony Wood, chief scientific officer at GSK. “Adding AIO-001, a potentially best-in-class medicine targeting the TSLP pathway, could expand the reach of our current respiratory biologics portfolio, including to the 40 percent of severe asthma patients with low T2 inflammation where treatment options are still needed.”

“We believe that this transaction speaks to the high potential of our long-acting anti-TSLP monoclonal antibody, AIO-001,” said Khurem Farooq, chief executive of Aiolos Bio. “By uniting with GSK, a leader with decades of experience developing respiratory therapies and a shared commitment to improving patient lives, we’re confident that we can rapidly advance this therapy in the hopes of significantly reducing the treatment burden for patients.”

Aiolos was founded in 2023 and only went public in October, launching with a $245m series A round co-led by Atlas Venture, Bain Capital Life Sciences, Forbion and Sofinnova Investments.

News: GSK boosts respiratory portfolio with $1.4 bln Aiolos Bio deal

APA acquires rival Callon in $4.5bn deal

BY Fraser Tennant

In the latest in a wave of deals reshaping the US oil landscape, oil and natural gas company APA Corporation is to acquire its rival Callon Petroleum Company in an all-stock transaction valued at approximately $4.5bn.  

Under the terms of the definitive agreement, each outstanding share of Callon common stock will be exchanged for 1.0425 shares of APA common stock, representing an implied value to each Callon share of $38.31 per share based on the closing price of APA common stock on 3 January 2024.

The transaction has been unanimously approved by the boards of directors of both APA and Callon.

“This deal is aligned with APA’s overall portfolio strategy and fits all the criteria of our disciplined approach to evaluating external growth opportunities,” said John J. Christmann IV, chief executive and president of APA. “It is also accretive and unlocks value for both shareholder bases, as increased scale will enable us to realise significant overhead and cost-of-capital synergies.”

Callon’s assets provide additional scale to APA’s operations across the Permian Basin, most notably in the Delaware Basin, where Callon has nearly 120,000 acres. On a pro forma basis, total company production exceeds 500,000 barrels of oil per day and enterprise value increases to more than $21bn.

“We are very proud of the significant steps we have taken to enhance Callon’s asset base, operational performance and balance sheet over the past several years,” said Joe Gatto, president and chief executive of Callon. “This combination with APA now provides for an enhanced value proposition for our shareholders built on their depth of experience and strong execution in the Permian Basin, flexibility for increased capital allocation, and ongoing delineation and optimisation efforts.”

The transaction is expected to close during the second quarter of 2024, subject to customary closing conditions, termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and approval of the transaction by shareholders of both APA and Callon.

Upon closing, a representative from Callon will join the APA board. APA’s executive management team will lead the combined company with headquarters remaining in Houston, Texas.

Mr Christmann concluded: “This transaction is aligned with our strategy of maintaining and growing a diversified portfolio, underpinned by large-scale core areas of operation while continuing to build a portfolio of medium and longer-term exploration-driven development opportunities.”

News: APA to acquire rival Callon Petroleum in $4.5 billion deal