Recordati Shares Surge Following Sanofi Agreement for Enjaymo Rights

Shares of Recordati saw a notable increase on Friday after the company announced its agreement with Sanofi to acquire the global rights to Enjaymo (sutimlimab), a first-in-class biologic designed to treat cold agglutinin disease (CAD).

As of 5:08 am (0908 GMT), Recordati’s stock was up by 5.7%, reaching €52.30.

This acquisition is part of Recordati’s strategy to expand its focus on rare diseases, thereby enhancing its portfolio in the specialty pharmaceuticals sector.

Enjaymo® is recognized as the only approved targeted treatment for CAD, a rare and chronic autoimmune disorder where the immune system erroneously attacks red blood cells, leading to hemolysis. The monoclonal antibody has gained approval from regulatory agencies in the U.S., Europe, and Japan, effectively fulfilling a significant unmet medical need in the management of CAD.

Since its approval by the FDA in 2022, Enjaymo has become an essential treatment option for patients at risk of life-threatening complications associated with this disease.

According to company statements, Enjaymo generated approximately €100 million in revenue over the 12 months ending August 2024, with expectations to exceed €150 million in revenue for fiscal year 2025. The peak sales potential is estimated between €250 million and €300 million, which more than doubles the current revenue figures for the product.

These projections showcase the significant growth potential for Recordati, particularly as the company anticipates that the transaction will enhance earnings before interest, taxes, depreciation, and amortization (EBITDA) as soon as 2025 while delivering margins higher than the current average for rare disease products.

The deal involves an initial payment of $825 million, with possible milestone payments up to $250 million contingent upon Enjaymo achieving specified sales targets.

The transaction is expected to finalize by the end of 2024, pending necessary regulatory approvals.

Analysts noted that adding Enjaymo to Recordati’s portfolio makes strategic sense, especially in bolstering its presence in the U.S. market.

To finance the acquisition, Recordati plans to use existing cash reserves and new bank debt facilities, projecting that its net debt will be around 2.4-2.5 times EBITDA by the end of 2024.