Regeneron and Sanofi-Aventis collaborate to develop antibodies

As part of the research agreement, Sanofi-Aventis will make an $85 million upfront payment to Regeneron and will fund up to $475 million of research over the next five years. Sanofi-Aventis will have an option to extend the research agreement for up to an additional three years.

Sanofi-Aventis will also increase its ownership of Regeneron’s outstanding common stock from approximately 4% to approximately 19% by purchasing 12 million newly issued shares of Regeneron common stock at a price of $26 per share, subject to customary closing conditions including antitrust clearance.

Sanofi-Aventis will have the exclusive option to co-develop with Regeneron each drug candidate in the collaboration portfolio. Development costs will be shared between the two companies, with Sanofi-Aventis funding drug candidate development costs up front and Regeneron reimbursing half of the development costs from its share of future profits to the extent they are sufficient for this purpose.

The first therapeutic antibody to enter clinical development under the collaboration is an antibody to the interleukin-6 receptor (IL-6R), which has started clinical trials in rheumatoid arthritis. The second is expected to be an antibody to delta-like ligand-4 (Dll4), which is currently slated to start its clinical development in 2008.

Regeneron will have the right to co-promote any and all collaboration products worldwide. In the US, profits will be shared equally. Outside the US, profits will be split on a pre-determined sliding scale with Sanofi-Aventis’s share ranging from 65% to 55%. In addition, Regeneron will be entitled to receive up to a total of $250 million of sales milestone payments when the collaboration achieves certain aggregate annual ex-US sales levels, starting at $1 billion.