Sanofi Shuts Down Principia's San Francisco Lab and Cuts 38 Jobs Following BTK Inhibitor Phase 3 Failure

Compiled & Translated | newborn

Sanofi subsidiary Principia Biopharma is facing a double blow. Just days after one of its key BTK inhibitors failed in clinical trials, Sanofi has now announced that it will close Principia’s laboratory in San Francisco, U.S., and lay off more than 30 employees.

According to the latest reports under California’s Worker Adjustment and Retraining Notification (WARN) Act, 38 layoff notices initially filed with the state at the end of August will take effect on October 8. A spokesperson stated that, according to Sanofi, due to high attrition rates, the company has had to reconsider its plans for the Principia laboratory in San Francisco.

Sanofi is now planning to conclude drug discovery research activities at the laboratory, close the facility by the end of this year, and fully vacate the premises by April 2022.

In an email statement, Sanofi said: "This is a difficult decision, and we plan to carry out this process responsibly and help our employees through this transition." The company stated that Principia employees can choose to continue as remote employees at Sanofi or apply for positions outside the San Francisco Bay Area.

Approximately one year ago, Sanofi acquired Principia for $3.68 billion, marking the sixth-largest biopharmaceutical acquisition in 2020. At the time, Sanofi believed that gaining full control of Principia would streamline the commercialization of its lead asset and eliminate future royalty payments. As early as 2017, Sanofi had already entered into an agreement valued at over $800 million to acquire the rights to Principia’s preclinical multiple sclerosis (MS) candidate drug, SAR442168.

However, Sanofi did not complete these payments. Instead, following the announcement of promising Phase 2 data for SAR442168, it began taking over the entire company. The data demonstrated that SAR442168 reduced new lesions in patients with multiple sclerosis (MS). Subsequently, Sanofi advanced the drug into four Phase 3 clinical trials, which are currently ongoing.

However, this acquisition was strongly criticized by hedge fund Kerrisdale Capital, which claimed that Principia’s pipeline was “worthless” because SAR442168 “has a mechanism of action that appears unrelated to the etiology of MS.”

Less than a week ago, rilzabrutinib, another promising pipeline drug from Principia, failed in its first pivotal Phase 3 clinical trial, failing to meet the primary and key secondary endpoints for the treatment of pemphigus, a rare autoimmune skin disease. Rilzabrutinib is an oral medication that targets Bruton’s tyrosine kinase (BTK). While BTK inhibition has proven to be an effective approach for treating B-cell malignancies, its efficacy in autoimmune diseases such as pemphigus and multiple sclerosis remains less certain.

However, Sanofi has not given up on rilzabrutinib and plans to continue evaluating the drug in rare blood disorders, including immune thrombocytopenia (ITP) and autoimmune IgG4-related disease.

Over the past year, Sanofi has been actively engaged in mergers and acquisitions. In August this year, the company also acquired Translate Bio for $3.2 billion to advance the deployment of mRNA technology in vaccine and drug development.

Source: Sanofi dumps Principia Biopharma's San Francisco labs with plans to immediately cut 38 jobs