Sanofi is expanding its neuroscience drug pipeline through the $470 million acquisition(Opens in a new window) of Vigil Neuroscience, a clinical-stage biotech with a drug that could introduce a new way of treating Alzheimer’s disease.
The merger agreement announced Thursday calls for Sanofi to acquire all outstanding shares of Vigil for $8 in cash per share. Vigil shareholders could receive more if the Watertown, Massachusetts-based biotech’s drug reaches the market. It’s currently on track for Phase 2 testing.
Vigil aims to treat Alzheimer’s with a drug that improves the function of microglia, a type of immune cell of the central nervous system that scouts for and eliminates things like disease-causing proteins. Microglial dysfunction is associated with some neurodegenerative disorders, including Alzheimer’s.
The Vigil drug, VG-3927, is an oral small molecule designed to target TREM2, a receptor found on microglia cells. By activating this receptor, the drug is intended to improve the function of these key immune cells. In a Phase 1 test(Opens in a new window) in 115 healthy volunteers, Vigil reported this drug was safe and well tolerated by study participants. No serious adverse events were reported. The results also showed the drug penetrated the CNS and engaged its TREM2 target.
Vigil planned to advance VG-3927 into a Phase 2 test in Alzheimer’s in the third quarter of this year. As for Sanofi, the pharma giant’s pipeline in neurodegeneration includes an antibody in early clinical development for Parkinson’s disease, but nothing for Alzheimer’s.
“TREM2 represents a compelling target at the intersection of immune dysregulation and neurodegeneration, particularly in people living with Alzheimer’s because they face devastating cognitive decline with limited treatment options,” Houman Ashrafian, head of research and development at Sanofi, said in a prepared statement. “Vigil’s expertise is complementary to our capabilities in neurology and reinforces our dedication to developing innovative medicines to improve people’s lives.”
Sanofi made a $40 million strategic investment(Opens in a new window) in Vigil last June. With that investment, the pharma giant also secured the right of first negotiation for the Vigil’s TREM2-targeting drug. At the time, the biotech said it expected the investment would extend its cash runway into 2026. But Vigil has since signaled potential financial concerns. In its first quarter 2025 financial report, Vigil disclosed doubts(Opens in a new window) about its ability to continue business operations within the next year. As of the end of March, Vigil reported a cash position of $87.1 million.
Sanofi is taking on Vigil’s TREM2-targeting drug after other companies have fallen short in their efforts to drug the target. In 2023, Denali Therapeutics and Takeda Pharmaceutical discontinued(Opens in a new window) their partnered TREM2-targeting drug candidate(Opens in a new window) based on Phase 1 data “and the rapidly evolving treatment landscape.” Last fall, Alector stopped testing of its TREM2-targeting antibody, AL002, after the AbbVie-partnered drug failed(Opens in a new window) to meet the goals of a Phase 2 test.
Vigil has another program that targets TREM2, but with an antibody. This drug, iluzanebart (formerly VGL101), has reached Phase 2 testing in adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP), a rare and fatal inherited neurodegenerative disorder with no FDA-approved therapies. Both VG-3927 and iluzanebart were licensed from Amgen. Sanofi does not want the iluzanebart program, so when the Vigil acquisition closes that drug’s rights will be returned to Amgen.
The merger agreement calls for Sanofi to acquire all outstanding shares of Vigil for $8 per share in cash. Vigil shareholders could receive an additional $2 more per share from a contingent value right tied to the first commercial sale of the Alzheimer’s drug. Payout of the contingent value right would bring the deal’s value to about $600 million. While the initial per share cash payment is well above Vigil’s $2.31 closing price on Wednesday, it’s just shy of the stock’s 52-week high of $7.95. For additional context, Vigil’s 2022 IPO was priced at $14 per share(Opens in a new window).
The acquisition still needs the approval of the majority of outstanding shares of Vigil common stock as well as other customary closing conditions. Sanofi and Vigil expect to close the transaction in the third quarter of this year.
Photo: Nathan Laine/Bloomberg, via Getty Images
