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French company’s purchase of Blueprint Medicines boosts immunology pipeline

Sanofi will buy the US maker of the world’s only approved treatment for a debilitating rare blood disorder for up to $9.5bn, as it seeks to boost its immunology medicine pipeline.

The French pharmaceutical company has agreed to pay $9.1bn in cash plus potential milestone bonuses for Cambridge, Massachusetts-based Blueprint Medicines, which is seeking to develop a drug for a wide range of immunological diseases. 

The deal is one of the biggest biotech acquisitions of 2025 and comes as Sanofi seeks to boost its drug pipeline. It is heavily dependent on immunology medicine Dupixent, which accounted for almost a third of revenues in 2024 and is under patent until 2032.

The Blueprint deal was a “strategic step forward in our rare and immunology portfolios”, said Paul Hudson, Sanofi’s chief executive.

“It complements recent acquisitions of early-stage medicines that remain our main field of interest,” he added.

In 2023, Hudson outlined plans to increase spending and focus on early research and development, rather than spending on large deals.

But Sanofi’s research efforts have suffered recent setbacks, including a failed late-stage trial last week for an experimental drug for chronic obstructive pulmonary disease that led shares to fall more than 6 per cent.

Last year, Sanofi agreed to sell a 50 per cent stake in its consumer healthcare division, in a deal that valued the business at €15.5bn. The Blueprint deal would use up financial firepower, although Hudson said Sanofi still had “sizeable capacity for further acquisitions”.

Sanofi’s $129 a share cash offer for Blueprint is a premium of 27 per cent over the Nasdaq-listed company’s closing price in Friday.

Blueprint’s drug Ayvakit is approved in the US and EU and is the only such medicine for two main systemic types of the disease mastocytosis.

Systemic mastocytosis is estimated to affect about 32,000 people in the US. The disease, caused by the abnormal build-up of immune cells known as mastocytes, can trigger many allergy-like symptoms including organ damage.

In May, Blueprint reported net revenues of just under $150mn from Ayvakit for the first quarter of this year and increased its forecast for full-year sales of the drug from $700mn to $720mn. Ayvakit was “well on its way” to meeting the goal of $2bn in revenue by 2030, said Kate Haviland, Blueprint’s chief executive.

Sanofi’s expertise in rare disease and immunology would help the two companies deliver “life-changing medicines” to more patients globally, she said on Monday.

Blueprint is developing a next-generation medicine for systemic mastocytosis, called elenestinib, as well as Blu-808, which targets a range of immunological conditions.

The milestone payments agreed by Sanofi are linked to Blu-808 clearing development and regulatory hurdles.

Summary

• Funds diversify geographically to counter tariff uncertainty
• China's Baidu, DiDi Global, Temu owner feature in fund picks
• Activist Palliser reveals stake in Japan's Toyo Tire

HONG KONG, June 2 (Reuters) - Hedge funds revealed their top investment ideas, ranging from Chinese self-driving taxis, an Indian drug retailer, to a Korean nuclear plant builder, at the annual Sohn investment conference in Hong Kong.

This year’s picks are geographically more diverse compared to last year, suggesting that investors are actively seeking to spread their exposure to counter tariff uncertainties and market volatility.

San Francisco-based Flight Deck Capital sees upside potential in Chinese search engine giant Baidu (9888.HK), opens new tab, betting on its fast-growing auto-driving business.

Similar to Google's self-driving unit Waymo, Baidu's Apollo Go "is the only robo-taxi player in China that's not dependent on the capital markets to scale," Flight Deck founder and managing partner Jay Kahn said at the conference on Friday.

He expects China's taxi and ride-share industry to grow to around $237 billion by 2034, with Apollo taking a 15% market share. But that segment, together with Baidu's cloud business, is currently given zero valuation by the market, he said.

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San Francisco-based fund pushes for change with Japan seen as next leg of sector’s development

Activist investor Farallon Capital Management has taken a top-three position in one of Japan’s largest insurance groups and is pushing for rapid changes in investment and governance, as it aims to tap opportunities on the “final frontier” of the sector.

The San Francisco-based firm has built a stake of between 4 and 5 per cent in T&D Holdings and is pushing for it to reduce investment risk at a faster pace, concentrate on its core insurance business and address its conglomerate discount, according to people familiar with the matter. 

It has also proposed the appointment of two new external directors, say the people, arguing that the current board lacks sufficient experience and is ill-suited to judge its mergers and acquisitions push abroad.

However, the company, which has a market value of $12bn, has already declared its opposition to Farallon’s board candidates. Its annual meeting is set for June 26.

In a 63-page presentation, T&D has pushed back against many proposed changes, without naming the firm, and said its board could not confirm the candidates met the requirements for outside directors or “would contribute to enhancing corporate value”.

Farallon, which describes itself as an engagement fund, is understood to have had a constructive dialogue with T&D since 2023, but the people add that it believes the company could move faster to strengthen the business.

The fund, which declined to comment, has been a shareholder of varying sizes since 2008. T&D, whose share price has risen 14 per cent this year, did not immediately respond to a request for comment.

Farallon, with $42bn in assets under management, has been increasingly vocal in its shareholder activism in Japan, becoming emboldened by the Tokyo stock exchange’s own corporate governance reform crusade.

It made its name in the country with high-profile bets, including a contentious engagement with Toshiba, where it successfully installed an outside director shortly before the conglomerate was taken private. 

In its first big public move since exiting its roughly $800mn position in Toshiba in 2023, Farallon earlier this year announced a stake in Astellas, one of the country’s largest pharmaceutical companies.

Activists have targeted companies from across the tech sector to auto parts, but the highly regulated insurance sector has remained largely untouched.

Singapore-based fund Effissimo Capital Management is one of the big exceptions, having taken large positions in Dai-ichi Life and Life Net, in which Farallon was also the first investor.

Alongside what Farallon believes is a strong underlying business, particularly the fast-growing Daido Life unit, the fund believes T&D can capitalise on the growing interest from private equity in Japanese insurance liabilities.

Private equity firms can, for example, buy blocks of policies that have become costly for insurers to maintain, due to capital requirements and low interest rates. Buyout firms can better manage their cash flows by employing higher-yielding investment strategies. Apollo’s merger with Athene in the US in 2021 is seen as one template.

Many firms are hoping that Japan can provide the next leg in the industry's development. Apollo already has an office here, along with Athene, and KKR has a strategic alliance with Japan Post Insurance, through its Global Atlantic arm.

“Japan seems to be the final frontier of high-quality liabilities . . . it has a huge number and they are largely untapped,” said one senior person in the industry.

So far, most deals in Japan have been modest, with industry insiders citing regulatory caution as the reason why more aggressive moves, or complete takeovers of companies, have not happened.

One of Farallon’s other main concerns at T&D is that the company takes too much equity risk and thus prioritises investment over insurance, without making the returns necessary to justify that decision.

The fund, according to the people, believes T&D has greater cross-shareholdings than appreciated, as it has designated some of its stakes as “pure investments” — a classification with which the fund does not agree.

“The stocks reclassified from strategic shareholdings to pure investments are managed by the asset management division, which decides whether to continue holding or sell them,” said T&D in its presentation. “Under the equity risk reduction policy, approximately 39 per cent of the cumulative amount reclassified as pure investments has been sold to date.”

Novo Nordisk’s semaglutide product to lose patent protection in China next year, according to L.E.K. Consulting

Competition in the mainland Chinese market for diabetes and weight loss drugs is set to intensify as more than 60 late-stage drug candidates are undergoing clinical trials, according to a recent report.

Up to 20 biosimilar or generic copies will vie for market share and add pricing pressure after Denmark-based Novo Nordisk’s semaglutide product loses patent protection in China next year, according to Boston-based global consultancy L.E.K. Consulting. Novo Nordisk’s patent will expire in 2031 in Japan and Europe and 2032 in the US, according to its latest annual report.

“The landscape in China is expected to become even more competitive than in developed markets, where the GLP-1 category is primarily dominated by leading multinational pharmaceutical companies,” said Helen Chen, L.E.K.’s global healthcare and life sciences co-head, in a report on May 15.

GLP-1 drugs mimic natural hormones, which signal the pancreas to release more insulin when blood-sugar levels are high, and also support weight loss by slowing digestion and reducing appetite.

Driven by sales growth of semaglutide, Novo Nordisk became the 10th largest drug company in the world in terms of revenue. London-based consultancy Evaluate said the firm’s revenue rose 25 per cent to US$42.1 billion last year.

Ozempic, a semaglutide formulated for diabetes, was approved in China in 2021. Wegovy, a treatment for weight loss, was approved last year.

Ozempic was the second best selling drug in the world last year, generating US$17.5 billion in revenue, after Merck’s blockbuster cancer drug Keytruda, Evaluate said.

“This growth trend is only just beginning as we enter a new era in metabolic disease management,” said Paul Verdin, Evaluate’s head of consulting and analytics, in an April report. “The companies marketing these game-changing products are set to dominate the rankings for years to come.”

In February, 60 to 70 drug candidates were in late-stage, meaning phase two or later, clinical trials in China. Some had the potential to directly compete with semaglutide and US-based Eli Lilly’s tirzepatide, which dominate the global market, L.E.K. said.

Among these candidates, around half were targeting the weight loss market, while eight were being developed as oral alternatives to injections. And around 20 aimed to mimic the actions of two or three hormones to achieve better clinical outcomes than single-medication treatments like semaglutide, L.E.K. added.

A potential rival that is undergoing clinical trials is mazdutide, whose development and marketing rights in China were licensed to Jiangsu province-based Innovent Biologics by Eli Lilly. It mirrors the effects of both a gut hormone and glucagon, which is produced by the pancreas.

Others include Jiangsu Hengrui Pharmaceuticals’ oral GLP-1 drug candidate; Hong Kong-based United Laboratories International’s treatment that targets two gut hormones and one pancreas hormone; and Hangzhou-based Ascletis Pharma’s GLP-1 obesity drug.

In October, Eli Lilly rolled out a 1.5 billion yuan (US$208 million) plan to expand a factory in Suzhou to meet rising demand for diabetes and obesity drugs in China and Europe.

“China – home to the largest diabetic and overweight populations – has become a critical battleground for both global pharmaceutical giants and local players,” L.E.K. said.

US-based Viatris, which led a group of generic drug makers that settled a patent dispute with Novo Nordisk on semaglutide last year, could launch a generic version of the drug around 2030, US brokerage Stifel said in a report in January.

Mainland China is the second largest drug market in the world and last year had 148 million adults with diabetes, more than any other nation, according to the International Diabetes Federation. Around half of these people were undiagnosed and the number of diabetics was projected to rise to 168 million by 2050.

According to a paper published in The Lancet, a medical journal, around 402 million people on the mainland over 25 years old were estimated in 2021 to be overweight or obese with a body mass index of 25 per cent or higher, accounting for 38 per cent of the population. That figure was up from 15.8 per cent in 1990 and it was expected to surge to 61 per cent by 2050.

The GLP-1 drug market in China was projected to triple in sales to US$4.7 billion by 2030 from US$1.43 billion last year, according to San Francisco-based Grand View Research.

- In May 2025, XPENG delivered 33,525 Smart EVs, representing growth of 230% year-over-year, surpassing 30,000 units for the seventh consecutive month. For the first five months of 2025, XPENG delivered 162,578 Smart EVs, marking a 293% increase compared to the same period last year.

- On May 28th, the Company launched the MONA M03 Max. MONA M03 Max lowers the entry barrier for urban AI smart driving to the 150,000 RMB range for the first time, making advanced vehicle technology more accessible to younger users. The MONA M03 Max is also the first XPENG model equipped with the AI Tianji XOS 5.7.0, offering over 300 new features.

- XNGP achieved a monthly active user penetration rate of 85% in urban driving in May 2025. Notably, the XPENG MONA M03 Max debuted the application of human-machine co-driving, enabling both ADAS and drivers to share control, providing a seamless collaboration between manual driving and smart driving.