Sanofi to buy Principia Biopharma for $3.68bn

French pharmaceutical group Sanofi has agreed to buy US rival Principia Biopharma for $3.68bn, further strengthening its core research and development areas of autoimmune and allergic diseases.

Under the terms of the agreement, Sanofi will buy all of Principia’s common stock for $100 per share in cash.

The transaction will give Sanofi full control of a multiple sclerosis treatment developed by Principia. Sanofi had already in-licensed Principia's BTK inhibitor for multiple sclerosis, which has now entered phase 3 trials.

Sanofi chief executive Paul Hudson said: "This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs.

"The addition of multiple BTK inhibitors to our pipeline demonstrates our commitment to strategic product acquisitions in our priority therapeutic areas."

The boards of directors of both companies have already approved the deal, which is due to complete in the fourth quarter.

Broker Liberum said Sanofi's recent disposal of its Regeneron stake for around $13bn was seen as paving the way for biotech acquisitions and Principia was seen as a likely target given the existing relationship, "hence this is not a big surprise".

"However, the offer price of $100 is a 66% premium to the levels where Principia was trading prior to this speculation emerging. This is a full valuation that will only be justified by Sanofi gaining approval for and successfully commercialising the MS drug."