PARIS • French drugmaker Sanofi has agreed on a potential US$2 billion (S$2.8 billion) deal with US biotechnology company Translate Bio to make vaccines, expanding their collaboration in the development of an inoculation against Covid-19.
The deal strengthens Sanofi's credentials in a market engaged in a frantic race to find a safe and effective vaccine against the coronavirus that has killed more than 472,000 worldwide.
The companies said they would expand their partnership to develop a wide range of mRNA (messenger ribonucleic acid) vaccines.
The mRNA technology, an area of Translate Bio's expertise, instructs human cells to make specific proteins that produce an immune response to a disease.
The deal will give Sanofi about 7.2 per cent of Translate Bio and exclusive worldwide rights to develop, manufacture and sell infectious disease vaccines using the US company's technology.
Sanofi expects its mRNA Covid-19 vaccine candidate to enter clinical trials by the end of the year and, if successful, gain regulatory approval in the second half of next year.
The group is also working on another Covid-19 vaccine with Britain's GlaxoSmithKline, targeting approval in the first half of next year.
Translate Bio, meanwhile, will receive an upfront payment of US$425 million, comprising US$300 million in cash and a common stock investment of US$125 million through a private placement at US$25.59 per share - a 57.6 per cent premium to Monday's closing price of US$16.24.
The biotech specialist will also be eligible for further potential milestone and other payments of up to US$1.9 billion, the companies said.
The deal makes Sanofi its fourth-largest shareholder, Refinitiv data shows.
Sanofi last month sold most of its 20.6 per cent stake in US partner Regeneron for more than US$11 billion and said it would use the money for innovation and general growth, with financial sources telling Reuters they expected the group to engage in a series of smaller deals rather than a large acquisition.
Separately, China has approved a coronavirus vaccine candidate developed by Chongqing Zhifei Biological Products' unit to begin human testing, the company said in a filing yesterday.
The potential vaccine, co-developed by Anhui Zhifei Longcom Biopharmaceutical and the Institute of Microbiology of the Chinese Academy of Sciences, has received a certificate from the National Medical Products Administration to launch clinical trials.
Chinese researchers and companies are testing six experimental shots in humans, and more than a dozen vaccines are in different stages of clinical trials globally against the virus.
However, none of them have passed large-scale, late-stage phase three clinical trials, a necessary step before entering the consumer market.