CARLSBAD, Calif.—Biotechnology firm Regulus Therapeutics has scored a coup by landing an investment of at least $35 million for early-stage drug discovery and development from French pharmaceutical giant sanofi-aventis. The potential value of this landmark deal—if certain milestones are met—is $750 million.
The global deal, penned June 22, marks the largest partnership in Regulus' biotechnology specialty, microRNA, and is also the largest miRNA therapeutics alliance to date, consisting of a $25 million upfront fee, a $10 million future equity investment subject to mutual agreement on company valuation and a three-year option worth $50 million for a broader technology alliance.
"The company could receive preclinical milestones as well as development and sales milestones for collaboration targets," says Regulus CEO Kleanthis Xanthopoulos. "In addition, Regulus is eligible to receive royalties on microRNA therapeutic products commercialized by sanofi-aventis. sanofi will support 100 percent of the costs of development and commercialization. Assuming exercise of the technology alliance option, Regulus has certain opt-in rights to participate in the development and commercialization of future sanofi-aventis clinical miRNA programs."
Focused on developing miRNA-based medicines toward four targets, the initial work in this venture will target the therapeutic area of fibrosis, a tissue disorder affecting millions worldwide, but currently with no effective treatment, Xanthopoulos says.
Regulus was attracted to sanofi-aventis because of the Paris-based pharma's reputation for being committed to developing innovative medicines that provide high-value to patients, Xanthapoulos says. The partnership combines Regulus' leading microRNA therapeutic product platform with sanofi's development and commercial expertise.
"There are clear parallels between Regulus' and Sanofi's R&D efforts, including significant efforts in the field of fibrosis," Xanthopoulos says. "Further, sanofi recognizes the huge potential of miRNA therapeutics and can provide Regulus with complementary capabilities and technologies that will support and enhance the Regulus effort."
Jack Cox, sanofi-aventis' senior director of public affairs and media relations, tells ddn, "sanofi-aventis' R&D has established a team that is working to discover and develop innovative nucleic acid drug candidates, initially focusing on miRNA-based therapeutic approaches. Regulus has a dominant IP position in this space and has built a team of scientists with a great deal of expertise in oligonucleotide chemistry. sanofi-aventis did not have the internal expertise or IP for the chemistry required. Therefore, the partnership with Regulus will allow us to rapidly get into the miRNA area."
In preclinical studies, Regulus has demonstrated that modulating miRNAs can effectively regulate disease pathways and produce therapeutically beneficial effects, Cox says. The idea behind Regulus' and other miRNA-based efforts is to create drugs that can inhibit these specific stretches of RNA, which regulate how entire networks of proteins are expressed. Regulus reports it is advancing miRNA therapeutics toward the clinic in several areas, including hepatitis C infection, cardiovascular disease, fibrosis, oncology, immunoinflammatory diseases and metabolic diseases.
Marc Cluzel, executive vice president of research and development at sanofi-aventis, says, "miRNAs are believed to be extremely important in human development and physiology. Together with Regulus, we will develop therapeutics which could potentially open a new paradigm in the treatment of major diseases and could offer an attractive new therapeutic approach for patients."
Regulus, formed in 2008 by Cambridge, Mass.-based Alnylam Pharmaceuticals and Carlsbad's Isis Pharmaceuticals, notes that this deal could potentially be bigger than the roughly $600 million one Regulus struck with GlaxoSmithKline in April 2008. That deal calls for the companies to work together on an miRNA-blocking drug for hepatitis C, while the original deal called for Regulus to work on four inflammatory disease candidates.
Regulus' alliance with sanofi-aventis is indicative of the interest at pharmaceutical companies in new approaches for innovative medicines that have the potential to transform disease, says John Maraganore, CEO of Alnylam.
Analysts have noted that sanofi-aventis' investment is unusual because Regulus is a young company, founded in 2007, and may not be ready to push a drug candidate into the extensive medical trials mandated by federal regulators. Simos Simeonidis, senior biotech analyst for Rodman & Renshaw, recently pointed out that Regulus may start its first clinical trial in the second half of 2011.
"Generally, Big Pharma will pay a significant upfront amount when they see the drug getting to clinical trials in Phase I or Phase II," Simeonidis says. "With this deal, sanofi-aventis did $35 million upfront, and hasn't even selected a target they're going to go after. So it's really very early-stage."
