Recordati’s Share Surge Following Sanofi Deal

Recordati’s (BIT:RECI) shares experienced a significant boost on Friday after the company announced a deal with Sanofi (NASDAQ:SNY) to acquire the global rights for Enjaymo (sutimlimab), a groundbreaking biologic aimed at treating cold agglutinin disease (CAD).

At 5:08 am (0908 GMT), Recordati’s shares were up by 5.7%, reaching €52.30.

This acquisition is a strategic move for Recordati as it expands its portfolio in the realm of rare diseases and specialty pharmaceuticals.

About Enjaymo®

Enjaymo® is the first and only targeted treatment approved for CAD, a rare autoimmune disorder where the immune system erroneously attacks red blood cells, leading to hemolysis. It has received regulatory approval in the U.S., Europe, and Japan, addressing a significant unmet medical need.

Since its FDA approval in 2022, Enjaymo has become crucial for patients, reducing severe complications linked to CAD.

Financial Projections

According to the company, Enjaymo generated approximately €100 million in revenue over the past 12 months as of August 2024, with expectations to exceed €150 million in FY 2025 and reach peak sales of €250-300 million—more than doubling its current levels.

Analysts at RBC Capital Markets noted that the deal value seems reasonable at 2.3-3.0x peak sales. Recordati anticipates the acquisition will enhance earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2025 and contribute margins that surpass its current average for rare disease products.

Deal Details

Under the agreement, Recordati will make an upfront payment of $825 million, with potential milestone payments of up to $250 million, based on Enjaymo’s sales performance. The closing of the deal is anticipated by the end of 2024, pending necessary regulatory approvals.

Analysts believe that Enjaymo will be a valuable addition to Recordati’s offerings, especially in expanding its presence in the U.S. market.

To finance the acquisition, Recordati plans to use a combination of cash reserves and new bank debt facilities, projecting a net debt of 2.4-2.5x EBITDA by the end of 2024.