Sanofi announced that it had entered into an agreement to acquire Vigil Neuroscience, which is a biotech that was working on developing drugs for neurodegenerative disorders. The reason for the acquisition was so that the big pharma could add another investigational molecule to its Alzeimer’s Disease (AD) pipeline. Specifically, this is going to allow it to obtain VG-3927, which is a TREM2 agonist drug being developed to treat these patients. In order to get its hands on this drug, it will acquire all outstanding common shares of Vigil for $8 per share at closing, which comes out to a value of $470 million (on a fully diluted basis). That’s not all either, because then shareholders of Vigil are also going to obtain a contingent value right (CVR) per Vigil share, which will entitle them to receive a cash payment of $2. However, the stipulation here is that for the CVR to be released, there has to be the first commercial sale of VG-3927. Thus, if this TREM2 agonist fails to pass through the remaining clinical studies or not be approved for marketing, then this will not be received by shareholders.
The buyout may have appeared to be that of a random thing, but this is not the first time in which Sanofi has dealt with this company, nor this drug. That’s because back in June of 2024, Sanofi made a strategic investment of $40 million to get several different types of rights to VG-3927, like exclusive licenses and others. This deal is expected to close in Q3 of 2025, barring that there are no other issues that may arise. It appears as though this big pharma has high hopes for the drug, especially considering that it is only a phase 2-ready drug. It is expected to be evaluated in a phase 2 study for the treatment of patients with Alzheimer’s Disease.
Alzheimer’s Disease is a devastating neurodegenerative disorder where amyloid and tau proteins buildup on the brain and kill of neurons, important for many functions. Not only that, but brain atrophy (shrinking) can occur as well. This phenomenon leads to dementia and many other problems that these patients face, like memory loss, reasoning skills, and thinking properly. What happens in AD is that microglial activation is dysregulated and leads to the buildup of deposits on the brain and inflammation. What VG-3927 is supposed to do is enhance the neuroprotective function of microglia, which in turn should allow for an improvement in proliferation and survival. This is an interesting approach, but not a very easy one because there are no drugs in place that stop or reverse disease progression.
If VG-3927 can perform its intended mechanism of action (MOA) of adequate microglial activation, then it could potentially have a far greater impact on disease progression than that of which is currently approved to treat these AD patients. However, this remains to be seen in the expected phase 2 study and beyond. Not only that, but Sanofi is taking a huge gamble in the hope that VG-3927 could be a differentiated molecule. The reason why I state that is because Alector reported failed results from its phase 2 INVOKE-2 study using AL002 for the treatment of patients with early AD. The primary endpoint of Clinical Dementia Rating Sum of Boxes (CDR-SB) failed to achieve statistical significance. This was a shock because in the release it was noted that indeed microglial activation was observed. In relation to this, it laid off approximately 17% of its staff and cut the program from its pipeline entirely. The hope is that with Vigil’s drug being differentiated, it won’t suffer a similar outcome, but this remains to be seen.