Sanofi pays $125M to go after undruggable inflammatory target with Recludix's preclinical program

Sanofi is paying Recludix Pharma $125 million and offering up more than $1.2 billion in biobucks for a pact taking aim at multiple immunological and inflammatory indications.

“It's a great deal for Recludix; we're really thrilled,” Nancy Whiting—who joined as the biotech’s first CEO in 2021 after more than 14 years at Seagen—told Fierce Biotech in an interview. “It's a really high-value deal and I think it'll be transformational for Recludix.”  

The agreement centers around Recludix’s preclinical STAT6 inhibitor. The first-in-class oral small-molecule drug works on the SH2 domain, which was historically considered an undruggable target.

Now, Recludix thinks it has cracked the code by blocking STAT6, a key nodal transcription factor that selectively mediates downstream IL-4 and IL-13 signaling, which drives type 2 inflammatory diseases like asthma, atopic dermatitis and allergies.

Sanofi has signed on to help develop and potentially commercialize the California biotech’s program, with expectations of entering the clinic in 2025.

"Recludix’s approach to targeting STAT6 has significant potential for a number of I&I diseases, especially where a precisely tailored oral therapy could best fit within the patient’s needs at various stages of disease," Frank Nestle, M.D., Sanofi’s chief scientific officer and global head of research, said in a July 20 release.  

Under the terms of the deal, Recludix will advance STAT6 inhibitors from preclinical research until the start of phase 2 trials, when Sanofi will take over clinical development. The French Big Pharma will also be responsible for commercialization activities and have global rights for any small-molecule STAT6 inhibitors that make it to market.

In addition to the near-term $125 million payment, Sanofi could potentially dole out more than $1.2 billion for development, regulatory and sales milestones alongside royalties on possible future sales. Sanofi is also giving Recludix the option to participate in U.S. profit or loss share.

“An option for Recludix to participate in a 50/50 U.S. profit share is really huge,” Whiting said, citing the ability for the biotech to participate in the development and economics of the drug in a meaningful way.

“This deal really helps validate that the work that we've done and the steps forward in the science we've made are really significant,” the CEO added. “In an era where a lot of financings are down rounds or very diluted, this was a very attractive option for us to bring in some non-dilutive capital, help continue to push this program forward and make sure it has absolutely everything it needs to be successful.”