What happened

Shares of Provention Bio (PRVB) skyrocketed 256% this week as of the market close on Thursday, according to data provided by S&P Global Market Intelligence. The massive gain came after the announcement on March 13, 2023, that French drugmaker Sanofi (SNY -0.78%) plans to acquire Provention Bio for around $2.9 billion.

So what

Sanofi understandably likes the idea of adding Provention's Tzield product to its lineup. The drug won U.S. regulatory approval in 2022 to delay the onset of stage 3 type 1 diabetes (T1D) in adults, as well as in children ages 8 and older with stage 2 T1D.

This transaction appears to make sense for Sanofi. The big drugmaker had previously teamed up with Provention Bio to co-promote Tzield. Sanofi's current lineup features several diabetes products, including Lantus and Toujeo.

The deal is also a good one for Provention Bio shareholders. The market cap for the biopharmaceutical company had fallen below $600 million before the acquisition by Sanofi was announced and had only briefly topped $1 billion for a few days back in early 2021.

Now what

Sanofi plans to move forward with a tender offer to acquire all outstanding shares of Provention Bio. Assuming there are no roadblocks, the transaction should be completed in the second quarter of 2023.

Provention expects to soon wrap up a late-stage clinical study evaluating Tzield in treating pediatric and adolescent patients with new diagnoses of stage 3 T1D. It should report top-line results from this trial in the second half of this year.