Dive Insight:

Unlike most large drug companies, Regeneron doesn’t use mergers and acquisitions to fortify its business. In fact, over its nearly 35-year history, the company has never purchased another public drug developer.

Rather, Regeneron has relied almost entirely on partnerships and its own research capabilities. A longstanding collaboration with the French pharmaceutical giant Sanofi, for example, has yielded five approved products, cementing Regeneron as a top maker of antibody-based therapies.

The company has also invested in genetic medicine, inking deals with Alnylam Pharmaceuticals, Intellia Therapeutics and Decibel Therapeutics. And, more recently, it forged an agreement with Checkmate that revolved around clinical testing of vidutolimod.

The acquisition announced Tuesday is therefore a notable, albeit relatively small shift for Regeneron, although the timing could be seen as opportune. Regeneron is flush with cash following the successful development of its coronavirus antibody treatment, which generated more than $7.5 billion in sales last year. Additionally, a recent and steep downturn in the biotech stock market has help to lower the valuations on many companies, including Checkmate, shares of which traded at more than $16 apiece in late 2020.

Still, Regeneron’s offer of $10.50 per share is more than four times what Checkmate’s stock traded at by market’s close Monday. Among biopharma acquisitions worth at least $50 million, the premium Regeneron paid for Checkmate is the largest of any deal since 2018, according to data compiled by BioPharma Dive.

Regeneron already sports an approved immunotherapy in Libtayo, which is used to treat two kinds of skin cancer as well as certain lung cancer patients. The company also two so-called bispecific antibodies in mid-stage trials for different blood malignancies, and a series of other experimental cancer drugs in earlier testing.

Should the Checkmate deal close as expected, Regeneron would add another drug to its arsenal.

To Regeneron, vidutolimod holds particular promise as a combination therapy. Researchers are now evaluating the drug’s use in skin and blood cancers when paired with other treatments like Opdivo, Merck & Co.’s Keytruda and Pfizer’s Bavencio.

“As we continue to advance and expand our research efforts in immuno-oncology, the acquisition of Checkmate will add a promising new modality to Regeneron’s toolkit of potential approaches for difficult-to-treat cancers,” said Regeneron CEO Leonard Schleifer in a statement.