Intent on finding a new and more effective way of developing drugs, Sanofi-Aventis has struck a deal to sell two of its R&D sites in Europe to Covance (CVD) while agreeing to pay the CRO up to $2.2 billion over 10 years to handle an important part of its research work.
"A key strategy for Sanofi-Aventis is to transform its R&D model and discover new medicines through the use of novel technologies and innovative partnerships," declared Sanofi R&D chief Marc Cluzel. Sanofi will sell its Porcheville, France and Alnwick, U.K. sites and facilities to Covance for about $25 million, and Covance will maintain employment on these sites for at least the next five years.
For Covance, the 10-year Sanofi contract builds on a similar 10-year pact struck with Eli Lilly in 2008. In that deal Covance bought one of Lilly's facilities in Indiana and lined up $1.6 billion worth of R&D work. And in July GlaxoSmithKline completed a deal to sell a research site in Italy to Aptuit.
For the pharma companies, these pacts are supposed to help them focus more effectively on their most promising programs, advancing new drugs at a more rapid pace. In this brave new world of drug development, the emphasis is on risk sharing and partnerships. For the CROs involved, the contracts provide a steady source of long-term revenue and expanded global operations with which to woo new customers.
- here's the Covance release
- read the Bloomberg report
- check out the AP story on the stock buyback
ALSO: Just yesterday Covance announced that it had opened a biotech services facility at its Indiana campus as it pursues work for Lilly and a second, unnamed pharma company while it pursues new business with other clients. On Tuesday Covance also announced plans to buy back $250 million worth of its stock.