Sanofi is increasing its neuroscience drug pipeline via the $470 million acquisition of Vigil Neuroscience, a clinical-stage biotech with a drug that would introduce a brand new method of treating Alzheimer’s illness.
The merger settlement introduced Thursday requires Sanofi to amass all excellent shares of Vigil for $8 in money per share. Vigil shareholders might obtain extra if the Watertown, Massachusetts-based biotech’s drug reaches the market. It’s presently on monitor for Part 2 testing.
Vigil goals to deal with Alzheimer’s with a drug that improves the operate of microglia, a sort of immune cell of the central nervous system that scouts for and eliminates issues like disease-causing proteins. Microglial dysfunction is related to some neurodegenerative issues, together with Alzheimer’s.
The Vigil drug, VG-3927, is an oral small molecule designed to focus on TREM2, a receptor discovered on microglia cells. By activating this receptor, the drug is meant to enhance the operate of those key immune cells. In a Part 1 check in 115 wholesome volunteers, Vigil reported this drug was secure and effectively tolerated by research contributors. No severe hostile occasions had been reported. The outcomes additionally confirmed the drug penetrated the CNS and engaged its TREM2 goal.
Vigil was planning to advance VG-3927 right into a Part 2 check in Alzheimer’s within the third quarter of this 12 months. As for Sanofi, the pharma big’s pipeline in neurodegeneration contains an antibody in early medical improvement for Parkinson’s illness (licensed from ABL Bio in 2022), however nothing for Alzheimer’s.
“TREM2 represents a compelling goal on the intersection of immune dysregulation and neurodegeneration, significantly in individuals dwelling with Alzheimer’s as a result of they face devastating cognitive decline with restricted remedy choices,” Houman Ashrafian, head of analysis and improvement at Sanofi, mentioned in a ready assertion. “Vigil’s experience is complementary to our capabilities in neurology and reinforces our dedication to creating modern medicines to enhance individuals’s lives.”
Sanofi made a $40 million strategic funding in Vigil final June. With that funding, the pharma big additionally secured the proper of first negotiation for Vigil’s TREM2-targeting drug. On the time, the biotech mentioned it anticipated the funding would prolong its money runway into 2026. However Vigil has since signaled potential monetary issues. In its first quarter 2025 monetary report, Vigil disclosed doubts about its means to proceed enterprise operations inside the subsequent 12 months. As of the top of March, Vigil reported a money place of $87.1 million.
Sanofi is taking over Vigil’s TREM2-targeting drug after different firms have fallen quick of their efforts to drug the goal. In 2023, Denali Therapeutics and Takeda Pharmaceutical discontinued their partnered TREM2-targeting drug candidate primarily based on Part 1 information “and the quickly evolving remedy panorama.” Final fall, Alector stopped testing of its TREM2-targeting antibody, AL002, after the AbbVie-partnered drug failed to satisfy the objectives of a Part 2 check.
Vigil has one other program that targets TREM2, however with an antibody. This drug, iluzanebart (previously VGL101), has reached Part 2 testing in adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP), a uncommon and deadly inherited neurodegenerative dysfunction with no FDA-approved therapies. Each VG-3927 and iluzanebart had been licensed from Amgen. Sanofi doesn’t need the iluzanebart program, so when the Vigil acquisition closes that drug’s rights can be returned to Amgen.
[Update: The following two paragraphs added with analyst comment.] In a be aware despatched to buyers, William Blair analyst Myles Minter famous that Vigil was anticipating the ultimate evaluation for iluzanebart’s Part 2 research, IGNITE, later this quarter. Vigil administration didn’t reply to the William Blair’s inquiry in regards to the standing of this system, however the agency believes the acquisition worth is truthful, and “ end result for shareholders within the present funding atmosphere, particularly if the IGNITE information is blended or not clear in demonstrating proof of idea in ALSP.”
“We might be shocked if the Vigil board would approve of this deal if IGNITE was clearly promising, given Sanofi ascribes no worth to it,” Minter mentioned.
The merger settlement requires Sanofi to amass all excellent shares of Vigil for $8 per share in money. Vigil shareholders might obtain an extra $2 extra per share from a contingent worth proper tied to the primary industrial sale of the Alzheimer’s drug. Payout of the contingent worth proper would carry the deal’s worth to about $600 million. Whereas the preliminary per share money cost is effectively above Vigil’s $2.31 closing worth on Wednesday, it’s simply shy of the inventory’s 52-week excessive of $7.95. For added context, Vigil’s 2022 IPO was priced at $14 per share.
The acquisition nonetheless wants the approval of the vast majority of excellent shares of Vigil widespread inventory in addition to different customary closing situations. Sanofi and Vigil count on to shut the transaction within the third quarter of this 12 months.
Picture: Nathan Laine/Bloomberg, through Getty Photos
