For commercialization outside the U.S., Regeneron could be eligible to about $320M.

Bayer HealthCare and Regeneron Pharmaceuticals entered into a collaboration agreement for the global development and commercialization, outside the U.S., of the VEGF Trap for the treatment of eye disease by local administration (VEGF Trap-Eye). The VEGF Trap-Eye, currently in Phase I and Phase II trials, is a protein that binds to or traps vascular endothelial growth factor (VEGF) and blocks its activity.

“The VEGF Trap is an excellent strategic fit for Bayer, which underscores our commitment to specialty pharmaceuticals,” says Arthur Higgins, chairman of the board of management, Bayer HealthCare. “We are encouraged by the early clinical data we’ve seen and believe the VEGF Trap has the potential to further transform the treatment paradigm for patients suffering from diseases of the eye.”

Under the agreement, Bayer and Regeneron will collaborate on the development of the VEGF Trap-Eye through an integrated global plan that encompasses the neovascular form of age-related macular degeneration (AMD), diabetic eye diseases, and other eye diseases and disorders.

Bayer will make an upfront payment of $75 million to Regeneron. The companies will share initial global development costs.

They will also jointly commercialize the VEGF Trap-Eye outside the U.S and will share equally in profits from ex-U.S. sales. Within the U.S., Regeneron has exclusive commercialization rights in all indications and will retain 100% of profits from any such sales.

Regeneron can earn up to $110 million in total development and regulatory milestones related to the development and marketing outside the U.S. of the VEGF Trap-Eye. A total of $40 million of these milestone payments are due upon the initiation of Phase III trials in wet AMD and diabetic macular edema.

Regeneron can earn up to $135 million in sales milestones when total annual sales of the VEGF Trap-Eye outside the U.S. achieve certain specified levels starting at $200 million.

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