Sanofi takes another stab at cancer with Evotec, Apeiron checkpoint partnership

Three days ago Sanofi ($SNY) expanded its tight R&D relationship with Evotec to take on cell-replacement treatments for diabetes. And the pharma giant picked up this morning where it left off, adding an immuno-oncology pact with Evotec that also brings Austria's Apeiron Biologics into the mix.

The deal marks a preclinical foray back into cancer, a field that burned Sanofi's fingers badly when it tried--and failed--to develop its own in-house oncology products. The pharma giant recently downsized its cancer R&D ops in the Boston area and subsequently moved its reduced cancer R&D group to its reorganized Sanofi Genzyme wing.

In this new deal Sanofi will embark on a journey to develop small molecule-based immunotherapies that can address "next-generation therapies in immuno-oncology which are expected to complement the current offerings of checkpoint inhibitors," according to their joint release. Sanofi didn't spell out the details, but it noted that there's more than $220 million up for grabs in milestones, along with potential royalties.

Merck ($MRK) and Bristol-Myers Squibb ($BMY) have received the lion's share of the attention in checkpoint inhibition, winning groundbreaking approvals for Keytruda and Opdivo. Behind the pioneers, though, come a massive pack of developers determined to cash in on what amounts to the new gold rush in biopharma; finding new and better ways to get the immune system to attack cancer, both with solo as well as combination approaches.

How hot is it? Just today you'll see a $120 million round for Editas, which is allied with Juno on CAR-Ts and TCRs, the third IO pact for AstraZeneca ($AZN) in 5 days, a CAR-T deal by Dr. Patrick Soon-Shiong's partners at Sorrento, and this alliance with Sanofi. The potential payoff may be large, but as everyone piles in, someone may stop to wonder how many ways this pie can be cut.

Sanofi has had a long, largely barren round of cutting-edge in-house research attempts, with little substantial progress to justify its multibillion-dollar R&D budget. But where it has excelled is in research pacts like this, where it collaborates with others to do some of the heavy lifting. Sanofi's internal R&D may get low grades for performance, but its business development group has scored repeatedly with big pacts involving the likes of Regeneron ($REGN) and Alnylam ($ALNY).

- here's the release