Regeneron and sanofi-aventis inked a deal in which the latter company will pay up to $560 million as well as make an equity investment worth about $312 million.
The firms will will jointly discover, develop, and market fully human therapeutic antibodies utilizing Regeneron’s VelociSuite of technologies.
Under the terms of the agreement, sanofi-aventis will make an initial payment of $85 million. Regeneron will also receive $475 million in research funding over the next five years. At the end of this period, sanofi-aventis has the option of extending the agreement for another three years.
Additionally, sanofi-aventis will increase its holdings of Regeneron stock from 4% to 19% with the purchase of 12 million newly issued shares. The company is paying $26 per share, a 51.6% increase over yesterday’s closing price of $17.15.
An antibody, Interleukin-6 receptor (IL-6), which has already started clinical trials in rheumatoid arthritis, will be the first therapeutic to enter clinical trials under the collaboration. In 2008, a second antibody, Delta-like ligan-4 (DLL4) is scheduled to start clinical development.