Sanofi to buy biotech firm Synthorx for $2.5b

France’s Sanofi on Monday agreed to buy California-headquartered biotechnology firm Synthorx in a cash deal worth about $2.5 billion as it steps up a push in the lucrative field of cancer drugs under its new chief executive.

Sanofi has offered to buy all the outstanding shares of Synthorx common stock for $68 per share in cash, or a 172 percent premium to Synthorx’s closing price on Dec. 6, 2019.

“This acquisition fits perfectly with our strategy to build a portfolio of high-quality assets and to lead with innovation, as you will hear at our Capital Markets Day tomorrow, December 10,” Sanofi Chief Executive Paul Hudson said in a statement.

“Additionally it is aligned with our goal to build our oncology franchise with potentially practice-changing medicines and novel combinations.”

Synthorx, which posted a 2018 net loss of $56.6 million, is a clinical-stage biotech company focused on therapies for people with cancer and auto-immune disorders, according to the company’s website.

Sanofi expects to complete the acquisition in the first quarter of 2020. By 0946 GMT, Sanofi shares were down 0.7 percent at 82.94 euros.

“The acquisition price is full at a 172 percent premium to Synthorx Dec. 6 close price and is a lot to pay for an early stage pipeline (lead drug THOR-707 is in phase 1 trial,” Liberum analysts said in a note.