Regeneron Shares Fall Premarket as Sanofi Signals Possible Stake Sale

By Colin Kellaher

Shares of Regeneron Pharmaceuticals Inc. (REGN) slipped more than 3% in premarket trading Tuesday after French partner Sanofi SA (SAN.FR) indicated it would explore the sale of all or part of its roughly 21.6% stake in the biotechnology company.

Sanofi, which holds about 23.4 million Regeneron shares, said in a filing with the Securities and Exchange Commission that it could begin selling off its stake upon expiration of the lock-up term of the investment agreement between the companies, which begins in December 2020.

The French drug maker said it could also use the shares as collateral.

Sanofi on Monday said it would stop investing in research into diabetes and cardiovascular diseases as part of a broader strategic overhaul and announced a $2.5 billion deal to buy cancer biotech Synthorx Inc. (THOR).

Analysts at Citigroup said they view Sanofi's SEC filing as "a statement of optionality, not a statement of intent or sale," and they noted that Sanofi would need five years to fully exit its Regeneron stake under the lock-up.

The analysts also said Regeneron could buy back part of the stake. The Tarrytown, N.Y., company last month said its board approved a $1 billion share-repurchase program.

Regeneron created the eczema and asthma treatment Dupixent and markets it jointly in the U.S. with Sanofi under a 2007 collaboration agreement. Sanofi markets the product internationally.

Paul Hudson, Sanofi's new chief executive, on Monday said Dupixent "has the chance to be one of the most successful medicines in the history of the industry."

Regeneron shares, which closed Monday at $365.63, were down 3.7%, to $352, in premarket trading Tuesday.

Write to Colin Kellaher at [e-mail]

(END) Dow Jones Newswires

December 10, 2019 07:37 ET (12:37 GMT)

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