(Bloomberg) -- Wall Street bankers are a lot less busy these days, what with the pandemic-induced drop-off in mergers and acquisitions and initial public offerings.But there’s a gritty, less glamorous dealmaking realm that has held up, and it’s helping banks offset some of that lost M&A and IPO revenue. A variety of companies, looking for liquidity in the weak economy, are selling off big stakes they’ve long held in public corporations.The latest came Monday when French pharmaceutical giant Sanofi launched a $13 billion sale of its 16-year-old, 21% stake in Regeneron Pharmaceuticals Inc. Regeneron, a New York-based biopharmaceutical firm, agreed to buy back about $5 billion of stock while the remaining $7 billion was sold to public investors in the largest public equity offering in the heath-care industry on record, according to data compiled by Bloomberg.Sanofi’s move came a few weeks after the pandemic’s first big deal of this kind, PNC Financial Services Group Inc.’s sale of its quarter-century-old stake of more than $13 billion in BlackRock Inc. The sale was the second-largest equity offering in the U.S. since Alibaba Group Holding Ltd.’s $25 billion IPO in 2014, according to data compiled by Bloomberg.More are coming. SoftBank Group Corp. raised $11.5 billion from transactions related to its stake in Alibaba Group Holding Ltd. which it bought in 2000, and another $2.9 billion capitalizing a 5% stake in its wireless arm. It is also closing in on a deal to sell its roughly 25% T-Mobile US Inc. stake, worth about $20 billion, with a portion being sold to Deutsche Telekom AG, people familiar with the matter have said.These transactions so far account for some of the biggest-ever announced of their kind. All told, there’s been $80.6 billion over 21 secondary offerings announced this year, which beats $53.1 billion over 36 such deals during the same period last year, according to data compiled by Bloomberg.That compares with a 33% drop to $22 billion in volume this year for IPOs in the U.S., the data shows. M&A activity involving U.S.-based targets plummeted 62% during the same period, sinking to $241 billion, according to the data.For Wall Street, the secondary offerings aren’t as lucrative as other dealmaking but they require less work. Banks usually received about 1% to 2% of the deal size for advisers fees, compared to 5% to 7% for handling an IPO. IPOs often involve intensive road shows lasting weeks.Jim Cooney, head of equity capital markets for the Americas at Bank of America Corp., said the strategies make sense in the current economy. “The market prefers that companies stick to their core mission and monetize non-strategic assets before selling their own equity,” he said.The offerings mark another way that companies, distressed or not, have been hunting for liquidity since the beginning of the pandemic. Some have drawn down revolving credit lines, sold bonds or new shares and sold stakes to private equity firms. Investors have been willing buyers of shares, attracted by the discounts since shares are marketed at prices below where the stock is trading.These stake sales have investors speculating on what holdings could be unwound next. Here are some sizable ones to watch based on Bloomberg’s data. Bloomberg News isn’t aware of talks about potential sales of these stakes.SoftBank, UberSoftBank is Uber Technologies Inc.’s largest shareholder with a 13% stake worth $7.7 billion. The Japanese conglomerate, led by founder Masayoshi Son, forecasts an operating loss of 1.4 trillion yen ($13 billion) for the fiscal year ended in March after writing down values of the Vision Fund’s investments including WeWork and OneWeb, a satellite operator that filed for bankruptcy.While it isn’t SoftBank’s oldest or most sizable investment, it could help to recoup some losses.Walgreens Boots, AmerisourceBergenWalgreens Boots Alliance Inc. is the largest shareholder in AmerisourceBergen Corp. with a 28% stake, worth about $5.3 billion. AmerisourceBergen recently made an offer to buy the Walgreens pharmaceutical wholesale division, Reuters reported earlier this month.The news had analysts speculating it could be part of a transaction related to Walgreens exiting part of its stake in AmerisourceBergen. The two companies first saw their paths intertwine in 2013 through a $400 million distribution deal that was supposed to last a decade.Nestle, L’OrealSanofi’s deal to sell Regeneron stock also had analysts speculating it could 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 worth $35.5 billion that Nestle SA holds in the French cosmetics maker. Since this is a 40-year plus relationship, the deal idea has been long pitched by bankers. Over the years, both sides have said that the investment is long-term.HKEx, Kweichow MoutaiHong Kong Exchanges & Clearing Ltd., owner of the Hong Kong Stock Exchange, has a 8.5% stake worth $20 billion in distiller Kweichow Moutai Co.Kweichow Moutai has become a favorite stock in mainland China, and is up 15% this year, while the Shanghai Shenzhen CSI 300 Index fell 6.7%. Cashing out could help fuel HKEx’s ambitions as a dealmaker. It made a surprise bid for the London Stock Exchange last year.Mondelez, Dr PepperMondelez International Inc., the maker of Oreo cookies and Triscuit crackers, holds about about 13% of Keurig Dr Pepper, following a deal in 2018 when Keurig took control of the soda maker. In early March, right as the pandemic led to lockdowns in North America, Mondelez, and another investor connected to JAB Holdings BV called Maple Holdings BV,sold a $1.1 billion stake in Dr Pepper.The broader question for investors is whether Mondelez could sell more of its shares, Bank of America analyst Bryan Spillane said at the time. Mondelez could tap its equity stakes as a source of liquidity to fund acquisitions, he said.Coke, MonsterThe Coca-Cola Co. owns more than 18% of Monster Beverage Corp.’s stock, making it the Corona, California-based company’s largest shareholder, and Monster also uses Coke’s distribution network. While Coke took the minority stake back in 2014 in a push to capitalize on promising new brands, the beverage giant is getting more aggressive with its own offerings, which has sparked tensions with Monster. Analysts have been trying to figure out what Coke’s energy products mean for the future of the partnership.Liberty Broadband, CharterA 26% stake in Charter Communications Inc. has become a crown jewel for John Malone’s Liberty Broadband Corp. which has guided the company on acquisitions since it invested in 2013. But Malone, a savvy dealmaker, has not stopped reshaping his portfolio even in a pandemic and helped pull off a merger of Liberty Global’s U.K. business with Telefonica SA’s earlier this month.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.
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.
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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.
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.
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.
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(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.
Shares in Sanofi
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.
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%.
Sanofi attracted flak in a recent row about vaccine access. Now Mancunian boss Paul Hudson is getting firepower of his own. The French company plans to sell most of its $13bn stake in US biotech Regeneron.
Regeneron (REGN) commences underwritten public secondary offering of its common stock held by Sanofi and repurchases shares for $5 billion.
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.
Sanofi (SNY) secures an FDA nod for Dupixent as the first biologic medicine for children aged from six to 11 years with moderate-to-severe atopic dermatitis.
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The U.S Food and Drug Administration said on Wednesday it had found high levels of a possible cancer-causing impurity in some versions of the popular diabetes drug metformin. The agency is reaching out to companies whose drugs had N-nitrosodimethylamine (NDMA) over accepted levels and will take appropriate action, a spokesman for the FDA said in an emailed statement. Bloomberg, which first reported the FDA's findings, said that some recalls of metformin were expected as soon as this week, citing a person familiar with the matter.