Sanofi backed away from an early stage-drug licensing deal with Maze Therapeutics after antitrust authorities moved to block the arrangement, the drugmaker announced Monday. 

The French drugmaker said it was “disappointed” with the Federal Trade Commission’s decision to file an administrative complaint and lawsuit in federal court to prevent Sanofi’s acquisition of Maze’s drug, MZE001, which is being studied for use in treating Pompe disease.

Sanofi entered into the license agreement with Maze in May for the biotech’s glycogen synthase 1 (GYS1) program, including MZE001, which has completed Phase 1 testing. Valued at up to $755 million, the deal had included a $150 million upfront payment from Sanofi and a private equity injection, along with up to $600 million contingent on certain milestones. 

As is customary, the deal was subject to approval by antitrust authorities, which had been expected in the second half of 2023. 

However, as FTC alleged in its complaint, the transaction would “protect Sanofi’s monopoly and eliminate competition between Sanofi and Maze to develop new Pompe drugs, denying patients and doctors the benefits of competition, including lower prices and greater innovation.”

After the FTC announced legal action, Sanofi backed off and issued a press release criticizing the agency’s approach to the matter.

“The delay associated with a long litigation has led Sanofi to conclude that it would not be in the best interests of patients to contest this litigation,” the company explained as its rationale for terminating the agreement. “We respectfully disagree with the action by the FTC.”

Pompe and circumstance

Pompe disease is a rare, debilitating and potentially fatal genetic illness caused by mutations in a gene that produces the enzyme acid alpha-glucosidase, which is responsible for breaking down glycogen. 

Without the enzyme, glycogen builds up in cells, causing symptoms of the disease, which include progressive muscle weakness and difficulty walking, breathing and hearing.

Sanofi, through its Genzyme subsidiary, makes three Pompe drugs approved by the Food and Drug Administration, all of which are administered intravenously. These are Lumizyme (sold outside the U.S. as Myozyme), an enzyme replacement therapy (ERT) cleared by the FDA in 2010, as well as Nexviazyme, greenlit in 2021. 

Both drugs’ labels include an indication for late-onset Pompe disease (LOPD).  Lumizyme/Myozyme sales fell 8.8% to €958 million last year, while Nexviazyme and Nexviadyme, the drug’s ex-U.S. brand name, kicked in another €196 million.

Sanofi isn’t the only player in this market. 

In September, Amicus Therapeutics received FDA approval for Pombiliti and Opfolda, a two-drug regimen for adults with LOPD who are not improving on their current ERT. The regimen lists for around $650,000 a year, and Leerink Partners issued a gross peak sales estimate of $1.1 billion.

Nevertheless, as the first oral medication available for these patients, MZE001, a twice-daily pill, threatens to undermine what the FTC argued is “Sanofi’s monopoly.” 

“Sanofi’s acquisition of Maze’s Pompe disease drug threatens to deprive patients of a new, innovative treatment and maintain a status quo of exorbitant pricing for essential life-saving medicines,” charged Nate Soderstrom, acting deputy director of the FTC’s bureau of competition. 

Biotech backlash

Still, the biotech industry didn’t take kindly to that assertion. In the hours following Sanofi’s pull-out, Bio-Twitter lit up with reactions, most of them negative.

“Major (and surprising) overreach by @FTC on a licensing deal,” tweeted PureTech CEO Daphne Zohar on Monday. 

“FTC vs Sanofi/Maze: very bad precedent for gov’t overreach. And bad in general for patients in all disease areas,” added Bruce Booth, partner at Atlas Ventures. “FTC continues to create friction in the deal mkt that is so vital to our collaborative biotech ecosystem reliant on external innovation.”

Those accusations of “overreach” have ratcheted up under FTC Chair Lina Khan. 

Since taking office two-and-a-half years ago, Khan has increasingly challenged mergers and acquisitions she deems anti-competitive. While none of her litigation, across administrative or federal court, has resulted in any wins, Khan is getting her way: nearly two-dozen deals have been abandoned after the FTC filed challenges. 

The agency touts these as victories. However, the strategy threatens to hurt companies, especially in the area of life sciences innovation. 

For instance, the FTC’s attempt to block Amgen’s acquisition of Horizon Therapeutics came as a surprise to analysts, since the two have completely complementary product portfolios. 

Amgen reached a settlement with the FTC that allowed the $28 billion merger to proceed, but only after significant blowback. That paved the way for Pfizer’s $43 billion purchase of Seagen, a deal which FTC also put under its antitrust microscope despite no overlap between the firms’ cancer drugs. 

“$PFE can acquire $SGEN, bringing together two solid oncology commercial and R&D franchises… But the FTC is blocking a Phase 1 deal with tiny biotech, for an asset probabilistically likely to fail in development #CrazyTimes,” Booth added.

Unless Khan reins in the rhetoric, the “crazy times” could get worse before they get better, wrote Yale professors Jeffrey Sonnenfeld and Steven Tian in a recent op/ed. Already, worries over FTC interference have had a chilling effect on biotech venture capital investments, which are down 25% this quarter. 

That could result in fewer new drugs being brought to market. Indeed, because the great majority of drug development attempts fail and are costly, M&A is key to bringing new therapies to market. That’s the contention of a new group formed to push back against the FTC and Justice Department M&A crackdown. 

Members of the group, dubbed PULSE (Partnership for the U.S. Life Science Ecosystem), include drugmakers like Merck, AbbVie and Amgen, along with state trade associations representing smaller firms.

“Unfortunately, the FTC’s approach in [the Sanofi-Maze] case undermines the type of partnerships that can have a meaningful benefit for patients,” noted a PULSE spokesperson. “The reality is that early-stage companies benefit and often need the support, expertise and efficiency that a larger firm can provide when it comes to specific disease states or therapeutic categories. These types of licensing partnerships offer the opportunity for a potential new treatment for patients; unfortunately, that’s a more uncertain reality given the FTC’s actions.”