It was less than 12 months ago that Paul Hudson took the reins at the French drug giant Sanofi, promising to refocus the company on more innovative, and lucrative, new medicines. On Monday, he spoke with STAT to about the decision to purchase Principia Biopharma for $3.7 billion — as well as Sanofi’s overall strategy and its Covid-19 vaccine candidates.

The biggest near-term opportunity for Sanofi is in Dupixent, the drug for autoimmune disorders that Sanofi sells with Regeneron, the Tarrytown, N.Y., biotech firm. Sanofi has said sales could reach $10 billion annually.

But it is clear that the nature of that deal was shaping Hudson’s opinions as he looked at new biotech partners. He favors purchasing “bolt-on” acquisitions in the range of $2 billion to $5 billion, he said. “I would rather not be paying royalties over the long-term,” he said. To fund such deals, including the purchase of Synthorx, a cancer drug maker, last December, Hudson recently sold Sanofi’s stake in Regeneron, worth more than $11 billion.

At the same time, Sanofi is focused on its experimental Covid-19 vaccines, one based on an insect cell platform that is already used to produce flu shots, and a second that uses mRNA technology similar to the technology being used by Moderna and Pfizer/BioNTech. The first effort is partnered with GlaxoSmithKline; the second is with Translate Bio.

Excerpts from the conversation, edited for length and clarity, follow.

Explain this deal to a skeptic. 

Ah! OK. Back in capital markets day last December, we highlighted some key assets that we thought were going to be game-changing. And we then got some data in April on the BTK in multiple sclerosis, you may remember, which we think could be best in disease. We know B-cell depletion is going to play a part, so we know an oral brain-penetrant BTK is going to be game-changing. So that was always very, very clear.

Then I looked at how I see the future going forward. We have a tremendous medicine in Dupixent. But it is partnered. And where I want to be on the science is unencumbered, where possible. And consequently, looking at our relationship with Principia — fantastic, it’s done an incredible job and exquisite chemistry, I mean, really exquisite chemistry —  it was quite obvious that they had more in their pipeline that we should be interested in.  

How do you plan on integrating Principia into Sanofi. Is this a deal for assets, or are there also scientists you want to keep?

Look, they’re a small company right now, but what they’ve done is really very elegant, which is why our BTK crosses the blood-brain barrier. So we know they’re good. They’re not a mystery to us. And they’ve done something, I think, pretty extraordinary. 

We would love people to stay. And, you know, we did something a little bit smaller, but still significant, with the Synthorx deal at the end of last year. These are not synergy deals. These are chances to to retain talent and to bring them with us.

We could do chemistry and we can transfer the processes, but we’d like to keep the people, and I’ll be saying that to them later today. And by the way, most of us have done this before. We don’t come to drop a load of bureaucracy on top of them and then and then wonder why nobody wants to stay. We come to celebrate what they’re great at and to keep them that way. 

So where does this leave you vis-a-vis other deals? You obviously have a lot of dry powder.

So, we’ve got a healthy balance sheet, right? I mean, it’s pretty well reported that we cashed in the Regeneron stake because, we thought we should be, perhaps, more in control of creating value.  

That was a passive investment in Regeneron. Now we’re getting to deploy some of that capital. And we could deploy more. The Principia and Synthorx deals are the sort of things you should expect. And I’ll have enough firepower to keep going. We’re trying to add really best-in-class science, game-changers that we think augment what we already have. So they were greater than the sum of our parts plays. We’re not just dashing into new areas because we’re excited. 

I know today is about Principia, but are there any updates on Sanofi’s work, with GlaxoSmithKline, on a Covid-19 vaccine?

That work continues at a breakneck speed. You’ll have seen that we effectively announced that we reached an agreement with the European Union to supply doses. We’ve reached an agreement with the U.K. to provide doses. And then you may have seen that we were included in Operation Warp Speed to provide doses. 

And we’ve said all along, and believe it, that our job as a long-term, more than 100-year vaccine company is to try and make sure these vaccines are globally available. And we’ll work damn hard to make sure that’s the case.

And I think we’ve come a long way in establishing our work and accelerating, because to be in Warp Speed you really need to have doses available before the end of the year, maybe not approved, but available. And so we’ve moved really, really fast on what is perhaps the most reliable platform, because it’s the only platform that has got an approved vaccine on it out of all of the players at the moment. And we’ll continue with mRNA, of course, as well. 

And this is definitely going to be a tortoise and the hare thing, because we’re catching up already and we’re going to play a big part, I believe, in getting to this new normal. Today is about Principia, but I can tell you, we’ve got 10,000 people working on vaccines at the moment and not getting much of a summer break because they know how important this is. And I’m proud of each and every one of them.

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