Sanofi is paying Regeneron $462 million (€404 million) to exit the immuno-oncology pact it formed in 2015. The move gives Sanofi the right to opt in to two bispecific programs but otherwise leaves each company free to operate independently.
When Sanofi struck the original deal, it paid $640 million upfront and committed to spending $750 million to take programs up to clinical proof of concept. The agreement was due to end in the middle of next year. But, having already severed their long-standing antibody partnership, the companies have cut the deal short in a restructuring that further loosens the ties between them.
To restructure the deal, Sanofi is paying $462 million to cover its share of drug discovery costs from the last quarter, a termination fee and development support for two clinical-stage assets.
Sanofi has the option to opt in to the two clinical assets—BCMAxCD3 and MUC16xCD3 bispecific programs—when they achieve proof of concept or further funding is required. Regeneron will spend up to $70 million to develop the BCMAxCD3 drug in multiple myeloma and as much as $50 million on the MUC16xCD3 bispecific in mucin-16 expressing cancers.
If Sanofi exercises its option on the multiple myeloma asset, it will lead development and fully cover the costs. Regeneron will refund up to 50% of the costs out of its equal split of any profits. Sanofi will lead development of the MUC16xCD3 bispecific outside the U.S. and split costs and profits equally.
The terms covering the BCMAxCD3 program are in line with those set in the 2015 agreement, which allowed Sanofi to opt in at any time up to proof of concept. Regeneron’s renegotiation of the terms covering the MUC16xCD3 asset has secured it a more prominent role in the program, notably by giving it the chance to lead development and commercialization in the U.S.
Regeneron also retains the full rights to all other experimental drugs advanced through the pact, leaving it with the fruits of an R&D drive Sanofi planned to spend $750 million on. The development and commercialization of PD-1 checkpoint inhibitor Libtayo is unaffected by the restructuring.
In a statement to unveil the news, Sanofi said the restructuring provides “increased flexibility to advance its early-stage immuno-oncology pipeline independently.” Sanofi will now be able to spend the money it was committing to the Regeneron pact on other partnered and in-house projects.
Whether that represents a better use of Sanofi’s R&D budget remains to be seen. The French Big Pharma has relied heavily on partners such as Alnylam and Regeneron in recent years to provide the breakthrough drugs its in-house teams have struggled to discover and develop. But Sanofi has begun to talk up its internal efforts and step back from key partnerships, most notably with Regeneron.