Sanofi goes all in with $2.5bn Synthorx buy

The French drugmaker bets big as it plays catch-up in the immuno-oncology space with a next-generation IL-2 buyout.

Deals

Sanofi is setting out its stall in immuno-oncology with a decisive $2.5bn play for the US biotech Synthorx and its next-generation IL-2 project Thor-707. This is a bold move, given that Synthorx essentially only had preclinical data to entice would-be suitors, but it could say volumes about the plans Paul Hudson, Sanofi’s new chief executive, has for the French pharma group.

Mr Hudson, who has only been in place since September, is to meet investors and analysts on Tuesday to lay out his plans for the future direction of a company many see as moribund. Shares have remained pretty range-bound for the past three years, so an increased, albeit late, focus on the industry’s hottest therapy area could bring a much-needed injection of investor enthusiasm.

By buying Synthorx, Mr Hudson is bucking a trend that has seen companies wishing to get their hands on IL-2 assets licensing these in. In 2018 Bristol-Myers Squibb paid $1.85bn for Nektar’s NKTR-214, so $2.5bn for a whole company with a clinical asset, three other projects under development and a peptide technology does not look so bad, even at the 172% premium to Friday’s closing price.

The deal looks even more appealing as Sanofi appears to have chosen an IL-2 project that is unshackled by deals with other pharma companies, as well as being a non-alpha IL-2 variant.

IL-2 is a validated mechanism of action thanks to Nestle’s Proleukin, but there are serious side effects attached to stimulating all variants of IL-2, in particular vascular leak syndrome, which has severely curtained the use of IL-2 therapies. Hitting non-alpha IL-2, however, appears to avoid triggering vascular leak syndrome; Thor-707 has yet to report any serious adverse events in primate models, and has demonstrated a half-life measured in days.  

Putting one and one together

While Thor-707 has shown signs of activity as a monotherapy in preclinical data, its real promise, analysts believe, lies in combination with Sanofi’s checkpoint inhibitor Libtayo. Combining IL-2 treatment with PD-(L)1 inhibition is thought to enhance CD8+ T cell responses, giving greater anti-tumour effects than checkpoint blockade alone. Adding Thor-707 might also help differentiate Libtayo, which became the sixth PD-(L)1 to market when it gained EU approval in 2018. 

Synthorx is not alone in going after non-alpha IL-2: Roche, Alkermes and Nektar have some of the most advanced projects in this pipeline. But there have been questions about the potency of Nektar’s NKTR-214 as monotherapy, with some analysts arguing that this could read across to combinations. Alkermes's ALKS-4230 has reported some toxicity issues, and its short half-life requires daily dosing, leaving Roche’s RG-7461 as the clinical asset to watch. RG-7461 is the only non-alpha IL-2 that has demonstrated clinical activity as monotherapy and shown a favourable safety profile.

Selected IL-2 targeting oncology projects
Product Companies Indication count Most advanced indication
Bempegaldesleukin Nektar Therapeutics, Bristol-Myers Squibb 13 Bladder cancer (Phase III)
Pulmoleukin Immunservice 2 Renal cell carcinoma (Phase III)
RG7461  Roche 3 Solid tumours (Phase II)
ALKS 4230 Alkermes 3 Solid tumours (Phase II)
BNZ-1 Bioniz Therapeutics 2 Non-Hodgkin lymphoma (Phase II)
THOR-707 Synthorx 5 Solid tumours (Phase I)
MDNA19 Medicenna Therapeutics 1 Solid tumours (Preclinical)

What will be interesting is how Thor-707 stacks up against the competition, caveats about cross-trial comparisons notwithstanding. The project has entered the clinic, and the 300-patient phase I/II Hammer trial, looking at solid tumours both as a monotherapy and in combination with a checkpoint inhibitor, could generate results in the second half of 2020.

Alongside executives at Synthorx, the other winners from today’s deal are the investors who between them have only put $76m into the company and seen a payoff from both the July 2018 IPO and today’s takeover. Whether Sanofi will be another winner remains to be seen. Thor-707 is one of the later entrants to the clinic and much will depend on how it performs when Hammer reads out.

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