HAMBURG, Germany—Evotec AG and Sanofi have begun exclusive negotiations for a major multi-component strategic alliance focused on early-stage drug development that could run over the next five years. The collaboration will consist of three major strategic initiatives focused on improving innovation effectiveness in the drug discovery and preclinical development space. Evotec also expects this undertaking to bolster its position as “the leading drug discovery collaboration partner to the pharma and biotech industry as well as academia.”
This collaboration will entail a minimum guaranteed commitment from Sanofi to Evotec of €250 million (approximately $309.5 million) over the next five years, including an upfront cash payment to be defined in the agreement. The initiative will also include a co-development agreement with associated upfront, development, regulatory and sales milestones, in addition to royalties that will benefit both parties. This deal is expected to be signed in the first half of 2015, subject to finalization of the definitive agreements and completion of the appropriate social process.
A key part of the deal involves Evotec taking over Sanofi’s Toulouse-based research and development operations—in 2012, those operations were threatened with closure to cut costs, though pressure from the French government and trade unions prevented such closure from taking place.
“Open innovation is a key driver of Sanofi’s strategy. We believe Evotec will be an ideal partner, a company that fits our quality expectations and our strategic vision. Our collaboration will secure the future for our employees in Toulouse and importantly accelerate our pipeline productivity,” Dr. Elias Zerhouni, president of global R&D for Sanofi, commented in a statement.
Within the three strategic initiatives, one will consist of pipeline-building, in which Sanofi and Evotec will collaborate on selected preclinical development projects with a focus on oncology and potential Cure X/Target X initiatives. Typically, that will feature Evotec accelerating projects to the point of clinical development candidates, at which point Sanofi may take over development and commercialization. Evotec will license a portfolio of projects from Sanofi, including five preclinical projects in oncology that the companies will jointly progress to the IND stage before potential partnering.
Additionally, Evotec will continue expanding its Cure X/Target X business model, an initiative that Sanofi will fund through a commitment to Evotec’s scouting strategy over the course of the agreements. Sanofi could also provide support for individual projects that progress through this program.
Evotec will also expand its capabilities by acquiring Sanofi’s drug discovery operations in Toulouse, a small-molecule discovery site with more than 200 scientists. Evotec’s expanded capabilities will cover the early-stage discovery and preclinical process from screening to medicinal chemistry.
In conjunction with these initiatives, the companies will be combining their small-molecule libraries to make them available for screening to Evotec’s partners. Sanofi’s library, established on its Toulouse site, has over one million compounds, greatly boosting Evotec’s library of more than 400,000 compounds. Evotec will screen the libraries against collaborators’ and partners’ targets under pre-agreed upon terms, from which Sanofi will receive a contribution if a product is developed from a library hit.
“We are very proud that Sanofi has chosen Evotec for this significant alliance,” Dr. Werner Lanthaler, CEO of Evotec, said in a press release. “This collaboration is a major milestone in the drug discovery space and accelerates Evotec’s strategy to become the leading drug discovery partner to the pharma and biotech industry as well as academia. We will warmly welcome the Sanofi employees to the Evotec Group and look forward to working with them.”
In other early-stage news for Evotec, announced a couple weeks after the Sanofi deal, the company noted that it achieved multiple milestones in ongoing alliances with its strategic research partners. The milestones were reached in its multi-target collaboration with Bayer HealthCare in endometriosis and within its partnership with Janssen Pharmaceuticals Inc. for the EVT100 series for the treatment of central nervous system (CNS) diseases. These milestones triggered revenues of approximately €8 million (about $9.7 million), which Evotec says will be recognized in the fiscal year 2014.
In its collaboration with Bayer, Evotec reached important milestones for the transition of certain molecules into preclinical development for the treatment of endometriosis. These milestones were achieved under the agreement between Evotec and Bayer signed in October 2012. The goal of this collaboration is to identify three clinical candidates within the five-year alliance. According to Evotec, “Both parties contribute innovative drug targets and high-quality technology infrastructures and share the responsibility for early research and preclinical characterization of potential clinical candidates in the disease area of endometriosis.”