Jim Cramer shares stock market news including buying Regeneron stock for cheap, avoiding airline stocks and being cautious buying too many stocks.
Sanofi (NASDAQ: SNY) plans to sell most of its stake in longtime partner Regeneron Pharmaceuticals (NASDAQ: REGN). None of that will change after Sanofi sells its shares. Instead, the decision seems to be tied to Sanofi's desire to raise capital.
One is a blue chip, the other a small-cap, but both are innovators with significant growth opportunities.
Shares of Regeneron Pharmaceuticals Inc. were up 0.4% in premarket trading on Tuesday, the day after the company said it will spend $5 billion to buy back some of its own shares after Sanofi announced it is selling most of its stake in Regeneron. Sanofi's stock had also gained 0.4% in premarket trading on Tuesday. "While Sanofi's exit is occurring earlier than expected (agreement lock-up expires on Dec. 20, 2020, and liquidation was expected to take multiple years), we don't believe it will cause material disruption to REGN's stock," SVB Leerink's Geoffrey Porges wrote in a note to investors on Tuesday. Sanofi owns 23.2 million shares of Regeneron, a roughly 20% stake, and plans to sell 12.8 million shares. Regeneron will fund the buyback with $3.5 billion in cash and $1.5 billion in bridge financing. The French drugmaker had first made an investment in Regeneron in 2004; the two companies have also collaborated since 2003 on a number of Food and Drug Administration-approved therapies, including rheumatoid arthritis treatment Kevzara, PCSK9 inhibitor Praluent, and eczema drug Dupixent. Kevzara is currently in clinical trials testing the drug as a treatment for COVID-19 patients. "The registered offering and share repurchase will have no impact on the ongoing collaboration between Regeneron and Sanofi," Regeneron said in a statement. Selling about 23 million shares in Regeneron may generate $13 billion in cash for Sanofi, setting the company up to make a mid-cap biotechnology deal, RBC Capital Markets analysts wrote on Monday. Since the start of the year, Sanofi's stock is down 5.4% and shares of Regeneron have gained 54.7%. The S&P 500 is down 8.5%.
Alnylam's (ALNY) NDA seeking approval for lumasiran for treating kidney disease, primary hyperoxaluria type 1, gets priority review from the FDA.
The drug company has not said what it plans to do with the cash, but analysts speculate that it will pursue a gene therapy company worth around $5 billion.
Drug companies Regeneron Pharmaceuticals, Inc (REGN) and Sanofi announced that the U.S. Food and Drug Administration approved its Dupixent drug for the treatment of dermatitis in children.The Dupixent approval is for the treatment of children aged 6 to 11 years with moderate-to-severe atopic dermatitis whose disease is not adequately controlled with topical prescription therapies.Atopic dermatitis, the most common form of eczema, is a chronic inflammatory disease that often appears as a rash on the skin. Moderate-to-severe atopic dermatitis is characterized by rashes that can potentially cover much of the body and can include intense and persistent itching.“This FDA approval is another milestone in the journey for Dupixent as an innovative biologic treatment for atopic dermatitis and other conditions driven in part by type 2 inflammation,” said John Reed, Global Head of Research and Development at Sanofi. “Caregivers of children with moderate-to-severe atopic dermatitis and their physicians now have access to a first-in-class biologic with a proven safety profile.”Dupixent is a fully-human monoclonal antibody that inhibits the signalling of the interleukin-4 (IL-4) and interleukin-13 (IL-13) proteins, and is not an immunosuppressant. Data from the Dupixent clinical trials have shown that IL-4 and IL-13 are key drivers of the type 2 inflammation that plays a major role in atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis (CRSwNP). More than 150,000 patients globally have been treated with Dupixent, the company said.George D. Yancopoulos, President and Chief Scientific Officer at Regeneron said that the two companies continue to test Dupixent in even younger children with uncontrolled moderate-to-severe atopic dermatitis from 6 months to 5 years old, as well as in children with uncontrolled, persistent asthma.“Additionally, we are investigating Dupixent in other diseases driven by type 2 inflammation including eosinophilic esophagitis, food and environmental allergies, chronic obstructive pulmonary disease and other dermatologic diseases,” Yancopoulos said.Shares in Regeneron have jumped 46% so far this year. The stock declined this week after the U.S. biotech company announced that it will repurchase $5 billion of common stock held by its partner Sanofi.Following the news, four-star analyst Geoff Porges at Leerink Partners maintained his Buy rating on the stock with a $622 price target.“In our view, that these shares are, or were, owned by Sanofi, or another institution, makes little difference to the value per share of Regeneron’s stock,” Porges wrote in a note to investors.What does the rest of the Street have to say? The 17 analysts are divided between 9 Buy ratings and 8 Hold ratings adding up to a Moderate Buy consensus. In view of the stock’s recent rally, the analysts’ $560.88 average price target is less optimistic than Porges indicating a mere 2.9% upside potential in the coming 12 months. (See Regeneron stock analysis on TipRanks).Related News: Regeneron Announces Secondary Offering Pricing At $515/Share Regeneron To Repurchase $5 Billion Stake From Sanofi Gilead’s Remdesivir Most ‘Beneficial’ In Covid-19 Patients Who Need Extra Oxygen, Study Shows More recent articles from Smarter Analyst: * Logitech Shares Lifted In Pre-Market On Share Buyback Plan, 10% Dividend Boost * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings * Microsoft Seeks $2B Stake In India’s Jio Platforms- Report * Google Faces Arizona Lawsuit Over ‘Unfair’ Location Data Storing
Paris-based drugmaker Sanofi is selling its stake in Regeneron Pharmaceuticals , which has ballooned in value in recent months as investors have bet that Regeneron's efforts to produce a "Covid-19 cocktail" treatment will prove successful. Sanofi said it will sell its stake in Tarrytown, N.Y.-based Regeneron, worth about $13 billion, to focus its efforts on cancer-fighting treatments. For its part, Regeneron has agreed to repurchase $5 billion of its stock from Sanofi, the companies said.
French drugmaker Sanofi has sold half of its stake in Regeneron, the US pharmaceutical group, in a $6.1bn deal that marks the biggest healthcare equity offering on record. Sanofi said on Tuesday that it had sold 11.8m Regeneron shares at $515 each, 9.6 per cent below Friday’s closing price, prior to news of the deal. The sale was downsized from 12.8m shares as the discounted pricing allows Regeneron to purchase more of its own shares in a separate deal with Sanofi, according to one person with knowledge of the share sale.
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the pricing of the underwritten public secondary offering of 11,831,496 shares of its common stock held by Sanofi at a price of $515.00 per share. Regeneron also agreed to purchase 9,806,805 shares directly from Sanofi, at a price of $509.85 per share (representing the price paid by the underwriters in the offering), for an aggregate purchase amount of $5 billion.
Regeneron (REGN) commences underwritten public secondary offering of its common stock held by Sanofi and repurchases shares for $5 billion.
Regeneron said it would buy back $5 billion of its shares directly, and announced a secondary offering for the rest of its shares held by Sanofi.
Regeneron Pharma (REGN) has now announced the pricing of the underwritten public secondary offering of 11,831,496 shares of its common stock held by French drugmaker Sanofi at a price of $515 per share.Regeneron has also agreed to purchase 9,806,805 shares directly from Sanofi, at a price of $509.85 per share (representing the price paid by the underwriters in the offering), for an aggregate purchase amount of $5 billion.In connection with the offering, the underwriters have a 30-day option to purchase up to an additional 1,183,150 Regeneron shares from Sanofi, the statement revealed. If the underwriters fully exercise their option to purchase additional shares, following the offering and share repurchase by Regeneron, Sanofi will have disposed of all of its shares, other than 400,000 shares it intends to retain.Regeneron will not receive any of the proceeds from the sale of shares in this offering, the company said. The offering will occur simultaneously in the United States and internationally through underwriters led by BofA Securities and Goldman Sachs as joint book-running managers.Shares in the biotech giant are currently trading at $545, after surging 45% year-to-date as investors grow more confident in its experimental antibody cocktail for Covid-19. “Progress on the development of a COVID-19 antibody cocktail remains on track – and a source of substantial investor interest” notes JP Morgan analyst Cory Kasimov.He has a hold rating on the stock and low $429 price target, writing that “Although we admittedly missed a great opportunity in REGN (shares up 50%+ YTD), we are finding it difficult to pull additional levers in our DCF model based on available data.”Overall, REGN shows a cautiously optimistic Moderate Buy analyst consensus, with a $559 average price target indicating 2.5% upside potential in the coming 12 months. (See Regeneron stock analysis on TipRanks).Related News: Gilead’s Remdesivir Most ‘Beneficial’ In Covid-19 Patients Who Need Extra Oxygen, Study Shows Gilead and Galapagos Score Positive Topline Results For Ulcerative Colitis Trial Regeneron To Repurchase $5 Billion Stake From Sanofi More recent articles from Smarter Analyst: * Logitech Shares Lifted In Pre-Market On Share Buyback Plan, 10% Dividend Boost * Billionaire Ackman Exits Berkshire Hathaway, Blackstone To Fund Opportunities * HBO Max Launches, But Not Yet Available on Amazon, Roku Platforms * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings
Shares in Sanofi
In the pivotal trial, more than twice as many children achieved clear or almost clear skin and more than four times achieved itch reduction with Dupixent plus topical corticosteroids (TCS) compared to TCS alone
(Bloomberg) -- Sanofi is selling a stake in Regeneron Pharmaceuticals Inc. valued at about $13 billion, giving the French drugmaker more firepower to potentially snap up promising assets in the cancer, gene therapy and rare-disease fields.The Regeneron exit, part of Sanofi Chief Executive Officer Paul Hudson’s revamped strategy to focus on fast-growing areas, is sparking speculation he’ll hunt for more targets following a deal in December to buy biotech company Synthorx Inc. for $2.5 billion. The transaction will boost Sanofi’s war chest to $50 billion, according to Bloomberg Intelligence.Regeneron has agreed to repurchase $5 billion of its stock from Paris-based Sanofi, the companies said on Monday. Regeneron said that Sanofi also plans to sell approximately 12.8 million shares, a holding worth more than $7 billion based on Friday’s closing price. That will mark the largest public equity offering in the heath-care industry on record.Setting a new course, Sanofi said in December that it would end its hunt for new diabetes and heart disease medicines, helping save more than $2 billion, as it expands in lucrative areas such as oncology. Sanofi may also look for gene therapy assets targeting rare illnesses in pursuit of deals of less than $5 billion, according to analysts at Citigroup Inc.“We believe the proceeds from this transaction will help further our ability to execute on our strategy to drive innovation and growth,” Hudson, who took the reins of Sanofi in September, said in a statement.Stock’s SurgeSanofi’s decision to sell comes after Regeneron’s stock surged 57% in the past six months. The French drugmaker holds about 23.2 million Regeneron shares, or 20.6% of the U.S. pharmaceutical company. When Sanofi first purchased shares of the Tarrytown, New York-based drugmaker in 2003, the stock traded below $20, compared with a closing price of $569.91 last Friday.Sanofi slipped as much as 1.3% in Paris on Tuesday, while Regeneron was off 4.7% in U.S. premarket trading.Besides cancer and gene therapy technologies, targets for deals may include immunology assets, according to analysts at Bank of America Corp. Switzerland’s Vifor Pharma AG could attract interest from Sanofi, Mirabaud analysts said.Bank of America and Goldman Sachs Group Inc. are the underwriters of the stake sale. Regeneron said it will fund the share repurchase with $3.5 billion of cash and $1.5 billion of financing from Goldman Sachs Bank USA.Partnership ContinuesSanofi and Regeneron said there will be no change to their ongoing partnerships. Through their collaboration since 2003, the companies have brought five medicines to market, and have additional drug candidates currently in clinical development. Sanofi will continue to own about 400,000 Regeneron shares.In December, Sanofi and Regeneron announced their intent to restructure collaborations for two drugs, the cholesterol-buster Praluent and the arthritis medicine Kevzara. Hudson also said at the time that Sanofi could raise funds by selling its stake in Regeneron after a lock-up period expires at the end of 2020. The two companies agreed to waive that lock-up and amend the agreement, Sanofi said in an email on Tuesday.The deal could revive speculation that Sanofi may buy back L’Oreal SA’s 9.4% stake in the drug company. That, in turn, raises the possibility that L’Oreal would buy back a 23% stake that Nestle SA holds in the French cosmetics maker.Covid-19 CollaborationBoth Sanofi and Regeneron have positioned themselves as front-runners in the race to develop therapies and vaccines to battle the coronavirus pandemic. Sanofi has received funding from the U.S. government to expedite research and development and scale up production capabilities for its high-profile vaccine candidates.Read More: U.S. Likely to Get Sanofi Vaccine First If It SucceedsSanofi is also working with Regeneron to evaluate how Kevzara could help very sick Covid-19 patients in respiratory distress. Initial trial results have suggested that the drug may help only the most critically ill patients -- the severest of the severe. (Updates analyst comments throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Sanofi (SNY) intends to sell majority of its shareholding in its collaboration partner, Regeneron. However, there will be no change in the ongoing collaboration terms.
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