Inhibrx Spin-off Notes

Notes from 6/16/2024

On January 22, 2024, Sanofi (SNY) announced that it had agreed to buy U.S. biotech company, Inhibrx (INBX) in a deal valued up to $2.2BN.

The deal is structured such that SNY will acquire Inhibrix’s INBRX-101 which is currently in the second of three phase three trials, while the remaining drugs will be spun off into a separate public company (Sanofi will retain an 8% stake). It will be funded with $200MM of net cash.

INBRX-101 is designed to treat Alpha-1 Antitrypsin Deficiency (AATD), an inherited rare disease that causes progressive deterioration of the lung tissue.

Under the terms of the deal, INBX shareholders will receive $30 per share in cash, a spin-off in a new company, and a CVR that is worth up to $5. INBX currently trades at $34.29. I assume the new company will trade at 50% of its net cash. This works out to a fair value of $2.11. That implies that the market is valuing the $5 CVR at ~$2.18. I’m going to dig into the CVR milestone payments to see if they are likely to be achieved.

When issued trading for the spin-off will begin on May 16th. Regular way trading will begin on May 30, 2024.