By Matthias Blamont and Ben Hirschler
PARIS/LONDON (Reuters) - French drugmaker Sanofi (SASY.PA) has agreed to buy Belgian biotech company Ablynx (ABLX.BR) for 3.9 billion euros (£3.4 billion), beating Novo Nordisk (NOVOb.CO) and marking its second big deal this month after buying Bioverativ (BIVV.O).
The deal is a further sign of accelerating merger and acquisition (M&A) activity in the global biotech sector and comes after Ablynx rejected a 2.6 billion euro offer from Denmark's Novo Nordisk.
Sanofi said on Monday it would pay 45 euros per share in cash for Ablynx, a premium of 21 percent over its closing price on Friday - and more than double the price before Novo went public with its initial bid.
Novo Nordisk conceded defeat, saying it did not intend to make a revised offer for Ablynx, which is developing a prized experimental drug for a rare blood disorder.
This month has seen a spike in multibillion-dollar deals in biotech, with U.S.-based Celgene (CELG.O) paying $9 billion for cancer specialist Juno Therapeutics (JUNO.O), and several experts predicting a bumper year for M&A.
Such deals are being driven by the need of large drugmakers to tap the promising new medicines being developed by smaller rivals to help revive flagging growth.
Last week, Sanofi agreed to buy U.S. haemophilia specialist Bioverativ for $11.6 billion, its biggest deal for seven years and a major play to strengthen its presence in treatments for rare diseases.
Sanofi Chief Executive Officer Olivier Brandicourt said the deals expanded the French company's late-stage pipeline and strengthened its line-up of treatments for rare blood disorders - but did not necessarily mark the end of its M&A ambitions.
"We have a strong balance sheet. We generate significant cash flow. We are going to look at opportunities on a case-by-case basis," he told reporters.
"We also identified CHC (consumer healthcare) previously as an area where we want to sustain a leadership position and therefore you can expect us to evaluate opportunities."
Both Pfizer (PFE.N) and Merck KGaA (MRCG.DE) are currently looking to divest consumer health businesses.
Sanofi said Ablynx would boost long-term value for its shareholders, while the takeover was expected to have a neutral impact on Sanofi's business earnings per share (EPS) in 2018 and 2019.
The Belgian group specialises in the research of novel drugs based on so-called nanobodies found in the immune systems of llamas and alpacas, for which it partners with several of the world's largest pharmaceutical companies.
Sanofi is already one of Ablynx's big pharma partners, after striking a deal in July 2017 to find new treatments for inflammatory diseases.
By buying the company outright it will now get access to Ablynx's most promising asset, the experimental drug caplacizumab for treating the rare bleeding disorder acquired thrombotic thrombocytopenic purpura.
Brandicourt said caplacizumab would complement Sanofi's line-up of blood products, following the acquisition of Bioverativ and an earlier deal to obtain global rights for fitusiran from Alnylam (ALNY.O).
Sanofi will be able to use its existing infrastructure and the recently acquired platform from Bioverativ to help to commercialize caplacizumab. It will also benefit from some of the other drugs Ablynx is working on, such as an infant anti-viral treatment, that would not have fitted within Novo Nordisk.
Berenberg analysts said Ablynx was a good fit but they estimated the deal would generate no more than a 4 percent return on invested capital, assuming caplacizumab sales of around 400 million euros by 2023.
The rare blood drug was also the main attraction for Novo Nordisk.
The Danish group has sat out previous rounds of M&A in the drugs sector to focus on its core diabetes business but it now needs to find new products for its struggling smaller biopharmaceutical unit, where Ablynx would have been a good fit.
That remains a challenge for CEO Lars Fruergaard Jorgensen, who took over a year ago, and has previously stated that Novo Nordisk needs external innovation to broaden its product line-up.
Shares in Sanofi were little changed, with pricing considerations offset by relief that Sanofi was finally taking action to improve its drugs portfolio, following its past failure to land big deals.
Sanofi lost out on buying California-based cancer specialist Medivation to Pfizer in 2016, and also missed acquiring Swiss biotech company Actelion, which was bought by Johnson & Johnson (JNJ.N) last year.
Morgan Stanley (MS.N) and Lazard (LAZ.N) advised Sanofi on the deal while JP Morgan (JPM.N) advised Ablynx.
(Additional reporting by Sudip Kar-Gupta in Paris, Teis Jensen and Stine Jacobsen in Copenhagen, and Robert-Jan Bartunek in Brussels; Editing by Louise Heavens and Alexander Smith)