Following the announcement that Sanofi (SNY) intends to sell the majority of its Regeneron Pharmaceuticals (REGN) stake, RBC Capital analyst Kennen Mackay told investors that BioMarin's (BMRN) rare-disease and gene therapy platform is among the "most intriguing potential targets" for the former. Sanofi is selling a stake in Regeneron valued at about $13B. Meanwhile, Regeneron has agreed to repurchase $5B of its stock from Sanofi.

SANOFI EXITING $13B REGENERON STAKE: Regeneron Pharmaceuticals has announced the commencement of an underwritten public secondary offering of its common stock through which Sanofi intends to exit its investment in Regeneron shares. The shares being offered by Sanofi will be sold in an underwritten public offering. Sanofi currently owns approximately 23.2M Regeneron shares and intends to sell approximately 12.8M shares in the public offering. Regeneron also announced that subject to and immediately following the close of the secondary offering, Regeneron agreed to repurchase approximately $5B of common stock directly from Sanofi. The purchase price to be paid by Regeneron will be equal to the net offering price per share after deducting any underwriters' discount and commission. Following the offering and Regeneron's $5B share repurchase, and assuming that the underwriters exercise their option to purchase additional shares in full, Sanofi will have disposed of all of its shares, other than 400,000 shares it intends to retain. The registered offering and share repurchase will have no impact on the ongoing collaboration between Regeneron and Sanofi, the companies stated.

BIOMARIN AMONG 'MOST INTRIGUING' POTENTIAL TARGETS: While keeping an Outperform rating on BioMarin, RBC Capital analyst Kennen Mackay said in a research note to investors that the company’s rare-disease and gene therapy platform is among the "most intriguing potential targets" for Sanofi after the latter disclosed its intention to sell the majority of its Regeneron stake. Current rare disease assets would fit well into Sanofi’s focus, and emerging hemophilia gene therapy and gene therapy pipeline could add a very long-lived platform for future development, he contended. If Sanofi were to pursue BioMarin, MacKey believes that its assets could justify a 30% premium ahead of the company's "transformational" ValRox and vosorotide launches, the analyst added.

PRICE ACTION: In afternoon trading, shares of BioMarin have gained about 9.5% to $106.75.