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Regeneron, Sanofi Restructure Immuno-Oncology Collaboration

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) and partner Sanofi (SNY - Free Report) announced that both the companies have restructured their existing global Immuno-oncology Discovery and Development Agreement for new immuno-oncology cancer treatments.

The original agreement, which was signed in 2015, is scheduled to end around mid-2020. Hence, the companies have revised the agreement and selected two clinical-stage bispecific antibody programs for further development.

Per the revised agreement, Regeneron will retain all rights to its other immuno-oncology discovery and development programs. Sanofi can advance its early-stage immuno-oncology pipeline independently.

In exchange, Sanofi will pay Regeneron $462 million, representing the balance of payments due under the existing agreement. This payment will cover Sanofi’s share of the immuno-oncology discovery program costs for the last quarter of 2018 and up to $120 million in development costs for the two selected clinical-stage bispecific antibodies plus the termination fee for the other programs under the original immuno-oncology agreement.

In addition, the revised agreement gives Sanofi the right to opt-in to the BCMAxCD3 and MUC16xCD3 bispecific programs when proof of concept is achieved or when the allocated funding is expended. On the other hand, Regeneron will commit up to $70 million to further develop the BCMAxCD3 bispecific antibody for multiple myeloma and up to $50 million to further develop the MUC16xCD3 bispecific for mucin-16 expressing cancers.

Assuming Sanofi exercises the right to opt-in, the company will lead development and commercialization of the BCMAxCD3 bispecific. Sanofi will also fund 100% of development costs, with Regeneron reimbursing up to 50% out of its share of collaboration profits. Both the companies will share global profits equally.

Regeneron will lead MUC16xCD3 bispecific development and will be responsible for the commercialization in the United States. The companies will share development costs and global profits equally. Sanofi will be responsible for commercialization outside the United States.

Meanwhile, the ongoing collaboration for the development and commercialization of Libtayo (cemiplimab-rwlc) will be unaffected by the revised agreement. The FDA has already approved Libtayo for advanced cutaneous squamous cell carcinoma (CSCC). A regulatory application for Libtayo has also been submitted in the EU. The drug is also being evaluated in multiple other cancers, including potentially pivotal trials in lung, cervical and skin cancers.

Regeneron retains full rights to its other immuno-oncology programs.

We note that  Regeneron has a global strategic collaboration with Sanofi for the discovery, development and commercialization of fully human monoclonal antibodies. Under the agreement, Regeneron has exercised the option to co-promote Praluent, Dupixent and Kevzara in the United States.

Regeneron’s key growth driver, Eylea was co-developed with the HealthCare unit of Bayer AG (BAYRY - Free Report) .  Regeneron has also partnered with Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) for the development of fasinumab in patients suffering from chronic pain from osteoarthritis (OA) of the knee or hip.

Regeneron’s shares have gained 7.5% in the past six months, against a decline of 17.6% for the industry.

 

Eylea and Dupixent continue to boost performance, while the company focuses on developing its pipeline further.

Zacks Rank

Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..

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