Analysts seeing read-through from Translate Bio takeover to Arcturus share strength
Sanofi (SNY) announced that it has entered into a definitive agreement to acquire Translate Bio (TBIO) for $38.00 per share in cash. The news sent shares of mRNA competitor Arcturus Therapeutics (ARCT) higher on Tuesday, with Piper Sandler analyst Yasmeen Rahimi saying that it is “clear large pharma has taken a significant interest in mRNA technology.”
SANOFI TO ACQUIRE TRANSLATE BIO: Sanofi has entered into a definitive agreement with Translate Bio for $38.00 per share in cash, which represents a total equity value of $3.2B a fully diluted basis. The Sanofi and Translate Bio boards unanimously approved the transaction. The purchase price represents a premium of 56% to Translate Bio’s volume-weighted average price per share over the past 60 days. The CEO of Translate Bio and Translate Bio’s largest shareholder, The Baupost Group, have signed binding commitments to support the tender offer. These binding commitments, combined with the Translate Bio shares already owned by Sanofi or its affiliates, represent a total of approximately 30% of Translate Bio’s total shares outstanding.
Following the announcement, both William Blair and Jefferies have downgraded Translate Bio to Neutral-equivalent ratings.
LARGE PHARMA INTEREST IN MRNA: Commenting on Sanofi’s $3.2B acquisition of Translate Bio, Piper Sandler analyst Yasmeen Rahimi told investors that she believes it is “clear large pharma has taken a significant interest in mRNA technology, especially since Arcturus Therapeutics, an mRNA-focused company with six pipeline assets, has traded up by about 30% since market open. Rahimi believes Arcturus is “significantly undervalued” given its three franchises and $1B in four large pharma partnerships with Johnson & Johnson (JNJ), Takeda Pharmaceutical (TAK) and Ultragenyx (RARE). The analyst also highlights that Arcturus has two new COVID-19 constructs, ARCT-154 and ARCT-165, which received the greenlight from its Singapore partner to commence Phase 1/2 studies. Rahimi has an Overweight rating and $140 price target on Arcturus shares.
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