Evotec lands two more deals to share risks and rewards of R&D

Germany's Evotec subverts the traditional CRO model by cozying up to its development partners with risk-splitting deals, and the company's approach to R&D has attracted Debiopharm and Convergence Pharmaceuticals with programs in cancer and chronic pain.

In the Debiopharm deal, Evotec has signed on to take care of discovery and preclinical work on yet-to-be-identified therapies for ailments including leukemia and prostate and brain cancers. Neither company is disclosing financial details, but Evotec said it's due R&D funding and "high double-digit" payments tied to clinical, regulatory and commercial milestones.

Secondly, Evotec has teamed up with Panion, a division of Convergence, in a three-year agreement to discover preclinical candidates to treat chronic pain. Panion secured a roughly $4 million grant to fund its work, and Evotec is on board to provide its early-stage expertise in exchange for undisclosed compensation.

The agreements fall in line Evotec's core business, which revolves around risk-splitting projects with drug developing sponsors, in which the company often handles early work on an external candidate in exchange for CRO fees and a cut of future profits. That model has attracted partners including Bayer, Boehringer Ingelheim and Johnson & Johnson ($JNJ).

But the Hamburg-headquartered company has been looking to diversify its approach, last month buying up a biopharma asset management company to bring in a pipeline of its own and launching a project called EVT Innovate, through which it'll develop un-partnered assets.

Risk-sharing arrangements--in which CROs stretch beyond the usual contractor relationship and take a financial stake in a project--are becoming more and more popular in the drug development world, including WuXi PharmaTech's ($WX) partnership with Ambrx, inVentiv Health's collaboration with Oncobiologics and Ergomed's co-development tie-up with Cel-Sci ($CVM).

- here's the Debiopharm release
- read the Convergence news