Shares of Regeneron
(NASDAQ:REGN) jumped Monday after the company said
development partner Sanofi
(NYSE:SNY) is buying a larger stake in the biotech drug maker.
Sanofi already owns about 17% of Regeneron’s stock and is limited to owning no more than 30% of the shares under a 2007 agreement between the companies. Sanofi and Regeneron are partnered to develop multiple drugs, including a promising experimental cholesterol treatment. (See Regeneron, Sanofi Take Step Forward With Cholesterol Drug
The companies say Sanofi was required to disclose its plan to buy more shares on the open market under US antitrust law.
“We are very happy with the relationship with Regeneron, but needed this technical filing to get freedom to operate,” Sanofi says in a statement to Minyanville. “Sanofi has the right to increase its shareholding in Regeneron. It may increase its holding over time subject to market conditions and within the terms of our partnership agreement.”
As to whether this is the beginning of a hostile or friendly takeover: “Sanofi has not announced any intention to take a controlling stake in Regeneron. Sanofi is bound by its 2007 investor agreement, which caps Sanofi's potential investment at 30% of Regeneron's common stock."
The statement, of course, doesn’t say Sanofi will never take over Regeneron. But the question is why Sanofi chose to buy the company’s shares now?
Regeneron’s stock is down a little in the past month but is still up 69% over the past year. The shares jumped 4% to $172.05 in morning trading Monday after earlier in the day jumping 9%. Paris-based Sanofi’s US shares rose 3% to $48.03.
Regeneron declined to comment beyond its press release.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.