Shares of Schroder UK Public Private Trust (LON: SUPP) are rising on Monday following the announcement that French drugs giant, Sanofi is to acquire UK biopharmaceutical firm Kymab.
Schroders acquired a 2.5% stake in Kymab when it took over the Woodford Patient Capital trust in December 2019 and rebranded it to the Schroders UK Public Private trust.
Sanofi will pay $1.1 billion upfront and up to $350 million once certain milestones are achieved.
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The acquisition of Kymab, which is focused on the development of fully human monoclonal antibodies, will see Sanofi take the full rights to its KY1005 monoclonal antibody, which recently met both primary endpoints in a Phase 2a trial in moderate to severe atopic dermatitis with patients’ diseases inadequately controlled with topical corticosteroids.
The transaction is expected to close in the first half of 2021.
SUPP expects to receive initial proceeds of $65 million once the deal is completed and an additional payment of up to $5 million subject to potential deductions and a deferred release over the next 24 months. Furthermore, there is the possibility of further payments of up to £20 million, subject to Kymab achieving certain regulatory milestones.
“Since we took over the investment management of the Company in December 2019, we have had a large team working with the management teams of the Company’s portfolio to support their strategic development,” said Tim Creed, portfolio manager and Schroders’ Head of European Private Equity.
“This successful divestment is an important milestone for the Company. It demonstrates the high quality of the Company’s investments and the increasing strategic value of many of the holdings as they mature. The expected proceeds will help us significantly in our communicated goal to create liquidity for the Company and reposition the portfolio,” added Creed.
SUPP shares are trading 10.28% higher on Monday at 31.15p following Frida’s close at 28.25p.
