French pharma giant Sanofi has been trying its best to snap up assets in the face of falling sales and competition for its flagship diabetes drug franchise. On Thursday, a number of tea leaves surfaced suggesting the firm may have rare disease specialist Sarepta Therapeutics in its crosshairs.
Sarepta chief Ed Kaye announced that he’ll be stepping down from his perch (while remaining a Sarepta board member and director). Oh, and Dr. Jean-Paul Kresse—a Sanofi executive who sits on Sarepta’s board—is also on his way out.
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The news made waves in the notoriously volatile biopharma investor market on Friday; Sarepta shares were up as much as 10% at one point. This is all still speculative. Sanofi, for its part, has said it doesn’t comment on “market rumors.”
But a buyout isn’t a particularly outrageous scenario. Sanofi has already faced a number of high-profile acquisition failures in recent months despite CEO Olivier Brandicourt’s mission to retool the company’s drug pipeline via licensing arrangements and other deals. Most recently, it lost out on a bid for Europe’s biggest biotech, Actelion, to Johnson & Johnson.
And Sarepta has notched some impressive accomplishments in the past year. The company won an unexpected and controversial Food and Drug Administration (FDA) approval for its pioneering Duchenne muscular dystrophy drug last year despite FDA scientists’ own concerns about the treatment. That implies a relationship with regulators that could be an asset to any drug company—especially one that desperately needs to get novel new products out into the market.