Sanofi’s 11 months watching over Vigil Neuroscience have led to a $470 million buyout. With the biotech into the final year of its cash runway, Sanofi has swept in to secure a small molecule that could challenge Novartis for the Alzheimer’s disease market.
The French pharma invested $40 million in Vigil in June 2024 in a deal that gave Sanofi an exclusive right of first negotiation to license the biotech’s small molecule TREM2 agonist. Sanofi’s investment extended Vigil’s runway into 2026, but the biotech continued to burn through cash, culminating in the company warning investors of a substantial doubt about its ability to keep going for another year.
This morning, Sanofi ended Vigil’s money worries by agreeing to buy the biotech for $8 a share upfront. Vigil traded at $2.31 a share when the market closed Wednesday, giving the company a market cap of $108 million. In addition to the upfront fee, Sanofi has agreed to pay $2 a share upon the first commercial sale of VG-3927.
VG-3927 is Vigil’s small molecule TREM2 agonist. Studies suggest TREM2, a receptor expressed primarily on microglia in the brain, is involved in the development of Alzheimer’s. People with rare TREM2 variants are more likely to develop the neurodegenerative disease and researchers have shown the receptor has a role in the clearance of toxic substances and abnormal proteins.
Yet, efforts to treat Alzheimer’s by targeting TREM2 have floundered. A phase 2 study of AbbVie and Alector’s TREM2-activating antibody flopped in November. Takeda and Denali Therapeutics axed a rival antibody in 2023 after seeing phase 1 data.
The setbacks left Novartis flying the flag for TREM2-targeting antibodies, with its VHB937 candidate set to enter (PDF) phase 2 development in Alzheimer’s in the second half of the year. As rivals fell away, Vigil continued to advance a small molecule that could be free from some of the problems that have held antibodies back.
Vigil has argued its small molecule maximizes receptor activation and microglial function because it does not bind soluble TREM2. The molecule’s lack of a domain that engages the immune system could nullify the risk of amyloid-related imaging abnormalities associated with TREM2 antibodies. If Vigil is right, the features will translate into greater neuroprotection and a better safety profile.
Responsibility for showing if the hypothesis holds up in the clinic will fall on Sanofi. Vigil was preparing to launch a phase 2 trial in the third quarter when it accepted the takeover offer. Sanofi confirmed a phase 2 trial is next on the to-do list.
While the Big Pharma is taking VG-3927 forward, the drugmaker isn’t buying Vigil’s other candidate, iluzanebart. The TREM2-targeting antibody, which is also called VGL101, is in phase 2 development in adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP). Final data from the trial, dubbed Ignite, are due soon.
William Blair analysts said they would be surprised if Vigil's board would have signed off on the Sanofi deal if the Ignite data had been “clearly promising.”
“We believe this [deal] is a good outcome for shareholders in the current funding environment, especially if the Ignite data is mixed or not clear in demonstrating proof of concept in ALSP,” the analysts said in a May 22 note.