Covance becomes sanofi-aventis’ R&D Partner as part of $2.2 billion agreement

Deal to run for 10 years, and Covance to acquire sites in Porcheville, France and Alnwick, United Kingdom

Jeffrey Bouley
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PRINCETON, N.J.—In what Covance spokesperson Michele Helies calls the largest alliance in history for a contract research organization (CRO), the New Jersey-based company marked the last morning of September by sealing a deal with French pharma giant sanofi-aventis for a 10-year, multibillion-dollar strategic research and development alliance.

Over the next ten years, Covance expects to provide drug development services to sanofi-aventis, with estimated payments ranging from approximately $1.2 billion to $2.2 billion.

In addition, sanofi-aventis will sell their Porcheville, France and Alnwick, United Kingdom sites and facilities to Covance for approximately $25 million. Reportedly, Covance will maintain employment on these sites for at least the next five years.

The entire transaction is expected to be completed before the end of the year.

"A key strategy for sanofi-aventis is to transform its R&D model and discover new medicines through the use of novel technologies and innovative partnerships," says Dr. Marc Cluzel, executive vice president for research and development at sanofi-aventis. "This alliance with Covance will help us preserve hundreds of valuable jobs in Porcheville and Alnwick, while driving our R&D efficiency for the benefit of the patients."

"We look forward to welcoming the world-class scientific talent in Porcheville and Alnwick to Covance, as well as adding state-of-the-art assets and new services to our portfolio," adds Joe Herring, Covance's chairman and CEO. "Today's announcement represents another win-win solution to the R&D productivity challenges facing the pharmaceutical industry and provides Covance with a unique source of growth."

Under the agreements, sanofi-aventis will utilize Covance's global R&D portfolio of discovery support, toxicology, chemistry, clinical Phase I-IV, central laboratory and market access services with annual commitments for these services increasing over the next decade. These agreements include a 10-year sole-source relationship for central laboratory services.

Covance will acquire chemistry, manufacturing and controls services with the addition of the Porcheville and Alnwick sites, including preformulation, drug formulation, preclinical and early-stage clinical active pharmaceutical ingredient manufacturing, and radiolabeled chemistry.

"This alliance is a strong signal that the biopharmaceutical industry is increasingly ready to embrace outsourcing as a key component of their R&D transformation—a move that can lower costs, create a more flexible R&D organizational structure, and get new medicines to market faster," Helies notes.

(Any thoughts or comments about this story? I had a few ruminations over at our blog, and I invite you to join in. Just click here.)

Jeffrey Bouley

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