Sanofi (SAN) Earnings Call Transcript & Summary

Welcome to the Kiadis conference call to discuss the news we issued this morning regarding the Sanofi offer of EUR 5.45 per share for Kiadis. The agenda for our call will be as follows, and it will be brief. Arthur Lahr, Kiadis' CEO will review the offer and the strategic rationale and the impact to our stakeholders, and we'll open the call for Q&A, for which we'll be joined by Paul van Hagen, Senior Vice President of Finance. I now turn the call over to Arthur.

Thank you, Amy. As we announced this morning, Sanofi has made a public offer for the issued and outstanding shares of Kiadis. Sanofi's offer of EUR 5.45 per share in cash, we believe represents a fair price and attractive premium for our shareholders. Given the risk rewards typical to a biotech company and the capital required to execute our stand-alone business plan, the Sanofi's offer secures long-term funding of Kiadis. This is beneficial for all stakeholders, but probably, most importantly, for patients, as joining forces with Sanofi will accelerate and broaden the reach of Kiadis' pipeline. As such, the offer and combination are supported unanimously by the Kiadis boards and our leading shareholder. As typical, the offer is subject to certain customary conditions and is expected to complete in the first half of 2021. The offer values Kiadis at EUR 308 million, and the offer represents the highest premium paid for an EU-listed biotech in the last 5 years. Importantly, there are no financing conditions or contingencies. As a company, we are just emerging from a period of significant transition. At the beginning of 2019, we were a completely different company with the products under review by the EMA and a program in Phase III development. In June of 2019, we acquired CytoSen Therapeutics in an all-stock transaction for a net upfront payment equivalent to EUR 50 million, adding a novel NK-cell technology and programs to our portfolio. With the unfortunate review by the EMA and discontinuation of that program at the end of 2019, we entered 2020 as a new company. With an early-stage pipeline, all focused on the NK-cell technology we acquired from CytoSen. Since then, just 18 months later, we have added significant value to the entire NK program with the finding of several INDS, manufacturing and process improvements and the finding of more than a dozen patents. Our NK-cell platform has unlimited potential. It will also require very significant financial resources and capability to execute on our plan. Sanofi has the wherewithal to accelerate the development of our programs and the resources to fully fund the platform and programs moving forward. The offer from Sanofi is truly a testament to the value that we've created really over the course of 2020 and a reflection of the hard work and dedication of the full team at Kiadis. Sanofi really represents the perfect strategic fit for Kiadis. They are the only pharma that has products serving oncology, transplant and infectious disease, and these are exactly our focus areas. Our K-NK platform is the first major investment that Sanofi has made in cell therapy. Our pipeline complements Sanofi's existing therapeutic expertise, and there are a multitude of ways that our technology can be applied to advance their pipeline in ours. We believe that the combining businesses, we will be able to accelerate Kiadis' trajectory by leveraging Sanofi's global infrastructure and capabilities in research, CMC, development, manufacturing and commercialization as well as Sanofi's financial strength to the benefit of all stakeholders. But most importantly, to the benefit of patients. Sanofi will provide the resources and capabilities necessary to accelerate the development of our pipeline programs for the treatment of blood tumors, solid cancers and infectious disease, maximizing their potential to the benefit of patients. For our employees, the offer represents a wealth of opportunity. With the power of Sanofi behind them, our team of cell therapy experts will be empowered to make new discoveries and expedite development of novel cell-based medicines, both as stand-alone therapies and in combination with Sanofi products. The opportunities for growth and development for our employees will be significantly enhanced in Sanofi's global organization. I want to take this moment to thank all of the Kiadis' employees for their amazing dedication and unwavering commitment to do what is right for patients. As part of Sanofi, we will be able to do even more. In closing, I would like to cover the next steps for the tender. The tender process in the Netherlands typically takes approximately 5 months, and we anticipate the same in our case. We need to obtain competition clearances, which we don't foresee being an issue. Sanofi will publish the offer memorandum after receiving approval from the AFM, and then the tender period will begin. Towards the end of the process, we will hold an extraordinary general meeting of shareholders. And with all that, the offer is expected to close in the first half of 2021. That's the end of my prepared remarks. Operator, we will now open the call for questions.

[Operator Instructions] And your first question comes from the line of Lenny Van Steenhuyse from KBC Securities.

Congrats on the successful takeover by Sanofi. I was wondering, is there any significant news full elements from the existing pipeline, which we should still anticipate between now and the 5 months before the closing of the transaction? And a second quick question, were there other interested parties or were talks exclusively held with Sanofi?

Thank you, Lenny, for those questions. Yes, as we've guided in our -- to the market, in the coming months, we expect to start different clinical trials, but we do not expect the data readout on any of the programs. With respect to your second question, we have not received any interest from other potential partners and acquirers.