By Scott MacDougallSanofi is taking an aggressive approach to its $1.4 billion acquisition of Vivo Pharmaceuticals.
The $7.2 billion deal is expected to close by the end of this year.
The acquisition of a small but significant company in Sanofi’s portfolio of pharmaceuticals is part of a broader plan to expand its portfolio of drugs in the US, where Sanofi is currently focused on two new drugs that have proven efficacy in treating heart failure.
“Vivo is a key component in SanoMed’s strategy to be an advanced leader in the treatment of complex chronic diseases, and we are confident that Vivo’s expertise in these fields will be utilized in our new business,” Sanofi CEO Paul Bortolotti said in a statement.
Sanofi will continue to own Vivo, which is headquartered in Dublin, Ireland.
Sanofi also plans to merge its existing drug business with Vivo to create a unified portfolio of drug development, manufacturing, and sales businesses.
SanoMerge, which will create a joint venture company that will have a joint responsibility for all business functions of Sano Medicines, will be led by COO Jeroen De Witte.
SanoMerges will have an initial capital of $1 billion and is expected start trading in the fourth quarter of 2020.
Vivo’s products include an inhibitor of the B cells, an anti-inflammatory and an immunomodulator.
SanioMerge said the company is investing in its own R&D, which includes working with a “number of industry experts,” including experts from pharmaceutical and medical device companies.
The deal was approved by the US Food and Drug Administration in January.
Sanico and Vivo share an ownership structure, with Sano holding 30% of Vivos stock and Vivo holding 20% of Sanofi stock.
Sanicommerge is one of the most aggressive acquisitions in Sanos recent history, which began in 2014 when Sanofi purchased a 20% stake in Vivo.
That sale ended with Vivojos shares trading at $13.90.
SaniMerge and SanoMerges acquisition of the company was a key part of Sanos strategy to expand into new drug development and manufacturing businesses.
In 2015, Sano’s total US sales grew to $5.7 billion, up from $3.3 billion in 2015.
Sanos overall drug sales grew by 3.9% in 2016, according to its most recent quarterly financial report.