Swedish Orphan Biovitrum Likely To Be Taken Private; Raising Our FVE to SEK 235 Per Share

No-moat Swedish Orphan Biovitrum has received a cash offer of SEK 235 per share, and the board has unanimously recommended that shareholders accept the offer. Given the confirmed support of two of Sobi's largest shareholders, which own a combined 43% of shares, as well as the support of the board, we're inclined to think the deal will go through, and we're raising our fair value estimate to match the offer price. The offer comes from Agnafit Bidco, which represents the combined interests of U.S. private equity firm Advent and Singapore sovereign wealth fund GIC. Sobi's shares traded above the SEK 235 per share offer price on Sept. 2, which could incorporate the expectation for competing bids. We previously cited Sanofi as a likely acquirer for Sobi, given its 2018 acquisition of Sobi's hemophilia partner Bioverativ, and had incorporated a 50% likelihood of such a deal into our Sobi fair value estimate in July 2018. However, pressure on hemophilia sales, lower international pricing in Sobi's international hemophilia markets, and pipeline disappointments led us to remove the acquisition premium from Sobi's valuation in July 2019. That said, Sobi's pipeline has evolved significantly since then, and Sobi's immunology and hematology pipeline--with a focus on rare diseases--could still be a good fit for Sanofi.