Mining the Regeneron perpetual partnership pipeline
Name: Olivier Brandicourt
Title: CEO of Sanofi
The honeymoon is about over for Sanofi's ($SNY) Olivier Brandicourt, who is completing his first 12 months as CEO. He will be judged going forward for his own successes, or missteps, and the industry will be sizing him up like any new leader who takes over a struggling Big Pharma player. Can he get the company back on a growth track ASAP? How will he negotiate the tricky task of cutting jobs in Europe? One place where Brandicourt will school the industry is in the value of the perpetual partnership pipeline.
For some years now, the French company has been turning to its deep partnership with Tarrytown, NY-based Regeneron ($REGN) as the secret sauce in the Sanofi development program. The relationship was forged in 2007 and has paid off well for both, giving Sanofi access to the innovative products its own R&D has struggled to produce and giving Regeneron a captive buyer.
While the relationship was around well before Brandicourt came on the scene, he doubled down on it last year. Having thrown in the towel on its own cancer drug development, Sanofi agreed to pay Regeneron at least $1.8 billion to lead the way in a play in immuno-oncology.
The two already had an early-stage checkpoint inhibitor. The new deal includes both monoclonal antibodies as well as bispecifics, but not chimeric antigen receptors or CARs. Regeneron will be in the driver's seat on early research, giving Sanofi opt-in rights. The two will then alternate development and commercialization responsibilities. Whoever takes the research lead will have the lead role on commercialization in the U.S.
There is plenty more outside of oncology. The two have already forged biotech history with a pioneering U.S. approval for Praluent, a PCSK9 cholesterol drug that is pegged to hit blockbuster numbers. And they are working on other significant programs. Sarilumab is a promising anti-IL-6R blocker which easily beat out a placebo in the first of a string of Phase III studies for rheumatoid arthritis. Dupilumab (REGN668) is an IL-4 receptor treatment for allergic asthma and atopic dermatitis.
The Regeneron cancer deal shows how far Brandicourt is prepared to go to buy blockbuster innovation. They were out front in the PCSK9 race. In immuno-oncology they are playing follow-the-leader behind Bristol-Myers Squibb ($BMY) and Merck ($MRK), which nabbed the first round of approvals for checkpoint inhibitors Opdivo and Keytruda. The question is whether an innovative biotech like Regeneron can sprint fast enough to catch up or surpass top-flight competitors who started in this realm years ago.
If it can, then other Big Pharma players may learn from the French drugmaker that there is great value in finding a bright biotech, paying top dollar to have it keep a pipeline of innovation on tap to fill the commercial infrastructure, and most importantly, resisting the urge to buy it outright.
-- Eric Palmer (email | Twitter)
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