SOBI and AstraZeneca in US$2bn+ deal on RSV antibodies

Though Synagis biosimilars are under development at South Korean Celltrion, Mabxience and Chinese iBio, palivizumab is currently  the only approved (US 1998, EU 1999) respiratory syncytial virus (RSV) prophylaxis for high-risk infants. RSV causes serious lower respiratory tract infections (LRTI). The humanised monoclonal antibody targets the fusion protein of respiratory syncytial virus (RSV) inhibiting its entry into the cell. 

MEDI8897 is a follow-on antibody to palivizumabco co-developed by AZ and Sanofi under a 2017 deal for the prevention of LRTI caused by RSV in a larger patient population. Under the deal, AZ and Sanofi, which is responsible for commercialisation, share all costs and profits equally. MEDI8897 is administered only once per season. In the United States and other areas with similar climates, RSV infections generally occur during fall, winter, and spring.

Under the deal with AZ, SOBI will pay US$1.5bn upfront, US$0.5bn thereof in newly issued SOBI shares. SOBI may pay up to US$470m for Synagis sales-related milestones from 2026 onwards. In 2016,  palivizumab had sales of US$1.4bn (AstraZeneca US$730m /AbbVie US$677m). With the acquisition SOBI will strengthen its US presence by doubling both the revenue and size of SOBI’s US organisation. 

Sobi will also pay US$20m in cash, per year, for the three years 2019-2021 as consideration for MEDI8897 plus US$175m following submission of the Biologics License Application (BLA) to the US Food and Drug Administration (FDA). The agreement also includes potential net payments of approximately US$110m on achievement of other MEDI8897 profit and development-related milestones, which are expected, if payable, from 2023 onwards. Other RSV treatments are also under development.

"The addition of Synagis will become an important strategic catalyst for SOBI’s future development and will form a powerful platform for growth in rare diseases. We see the acquisition as a stepping stone to drive sustainable growth in the US and make Sobi more attractive for partnering,", said Guido Oelkers, President and CEO at SOBI.

Following completion of the acquisition, AstraZeneca will hold 8.1% of the total shares and votes in SOBI. The US$1bn cash consideration will be funded by way of loans made available by BNP Paribas, Danske Bank, Skandinaviska Enskilda Banken and Svenska Handelsbanken. Jefferies International Ltd. is acting as sole financial advisor to Sobi and Latham & Watkins LLP and Mannheimer Swartling Advokatbyrå AB are acting as legal advisors to Sobi in connection with the transaction.