(Photo : pixabay.com)
pixabay.com

Italian pharmaceutical company Recordati, announced on Friday that it is planning to sign a $ 825 million contract with Sanofi to acquire the global rights of a rare autoimmune disease drug manufactured by the Paris-based drugmaker.

Recordatiwill make an additional commercial milestone payment of $ 250 millionto buy the French healthcare's Enjaymo, which is used to treat a rare B-cell lymphoproliferative disorder called cold agglutinin disease (CAD), the company said in a statement.

The International pharmaceutical company will use existing cash and new committed bank debt facilities to fund the acquisition, which is expected to be completed by end of 2024.

Share Prices of Recordati and Sanofi went up by 5.3 percent and 1.3 percent respectively following the announcement, Reuters reported. The new move will lead to 'optimized production' and will generate more revenue for the company, the news agency, while quotinga Milan based trader, said.

Enjaymo, which generated a revenue of € 100 million in a year (as of Aug 2024) is predicted to cross € 150 million by 2025.

Enjaymo has been used to treat hemolysis, a condition which causes destruction of red blood cells in CAD patients since its approval in 2022 by the US Food and Drug Administration (FDA), European Commission and the Japanese Ministry of Health, Labor and Welfare.

Through its latest move, the Milan- based company is expecting to expand its rare disease franchise and help thousands of patients affected with CAD.

"This transaction is in-line with ourbroader strategy, reaffirms our commitment to the Rare Diseases space and is complementary to ourOncology portfolio, specifically Sylvant,"Rob Koremans, Chief Executive Officer of Recordati, said.

"Enjaymofurther expands our Rare Diseases footprint in theU.S., Japan and Europe, and will contribute positively to both our top and bottom lines. Most importantly,with a strong clinical profile and as the only product approved for the treatment of CAD, Enjaymoaddresses a serious unmet medical need for patients living with this debilitating disease."

The Italian firm, which operates in 150 countrieswith a consolidated revenue of € 2,082.3 million, said it is expecting a net debt of about 2.4-2.5 times its pro-formaearnings before interest, taxes, depreciation, and amortization (EBITDA), and anticipated to decrease its total financial leverage to less than2.0 times its pro-forma EBITDA in the financial year 2025.

More About CAD

Unlike the antibodies released by the immune system to destroy the germs which have entered our body, in CAD, the immune system releases an autoantibody, or 'cold agglutinin' which attacks and destroys the healthy red blood cells which carry oxygen to different parts of the body. A deficiency of the red blood cells leads to several serious health issues.

Every year, one in a million people is detected with CAD and between 300 and 3000 people in US have CAD, according to experts from the Cleveland Clinic.