Regeneron Pharmaceuticals and Sanofi said today they have launched a new global collaboration to discover, develop, and commercialize new immuno-oncology antibody treatments, in a deal that could generate more than $2 billion for Regeneron.

The companies have agreed to jointly develop a programmed cell death protein 1 (PD-1) inhibitor now under Phase I study, and said they plan to initiate clinical trials in 2016 with new therapeutic candidates based on ongoing preclinical programs.

Beyond PD-1, other programs in preclinical development include antibodies to lymphocyte-activation gene 3 (LAG3), glucocorticoid-induced tumor-necrosis-factor-receptor-related protein (GITR) and a programmed death ligand (PD-L1) inhibitor.

The agreement covers both monoclonal antibodies and new bi-specific antibodies. Regeneron has developed a flexible manufacturing platform designed to enable efficient production of bi-specific antibodies that are otherwise similar to natural antibodies.

The new collaboration is also intended to advance bi-specific antibodies that target hematologic and solid cancers, either as monotherapies or in combination regimens with other immune modulating treatments.

“We believe the approaches most likely to deliver the best results to patients will combine multiple innovative therapies acting on different pathways and targets both in the tumor and the body's immune response—and will precisely target these medicines to the right patient,” George D. Yancopoulos, M.D., Ph.D., Regeneron CSO and president of Regeneron Laboratories, said in a statement.

He said Regeneron’s VelocImmune® technology for producing fully human monoclonal antibodies, plus the company’s VelociGene® technologies for the modification of the mouse genome, combined with its human genetics capabilities, “uniquely positions the Sanofi-Regeneron Alliance to accelerate the development of potential new immuno-oncology treatment options for cancer patients.”

The exclusive collaboration will last five years, with an ability to extend the collaboration for selected ongoing programs for an additional three years. The agreement does not include chimeric antigen receptors. Potential therapeutic targets or mechanisms were not disclosed by the companies.

Sanofi has agreed to pay Regeneron an initial $2.17 billion, starting with $640 million upfront. The companies will spend $1 billion for discovery through proof of concept development (typically a Phase IIa study) of monotherapy and novel combinations of immuno-oncology antibody candidates. Of that billion dollars, Sanofi will pay $750 million, with the remaining $250 million to come from Regeneron.

The companies have also committed to equally fund an additional $650 million—$325 million per company—toward development of REGN2810, a PD-1 inhibitor. In addition, Sanofi will pay Regeneron a one-time payment of $375 million tied to a sales milestone: Sales of a PD-1 product and any other collaboration antibody sold for use in combination with a PD-1 product exceed $2 billion in any consecutive 12-month period.

Finally, the two companies agreed to re-allocate $75 million over three years for immuno-oncology antibodies from Sanofi's $160 million annual contribution to an existing antibody collaboration launched in 2009. Beyond the committed funding, additional funding will be allocated as programs enter post-POC development, Regeneron and Sanofi said.

“With more than eight years of successful collaboration between us, I am confident in our ability to advance these novel programs. In addition to PD-1, the collaboration brings together a range of validated, innovative preclinical programs that have unique potential to help patients either as monotherapy or in combination approaches,” Elias Zerhouni, M.D., Sanofi’s president, global R&D, said in a statement.

Under their latest collaboration, Regeneron will oversee discovery, antibody generation, and development through proof-of-concept, at which time Sanofi can opt in to further development and commercialization. In the existing antibody collaboration, by comparison, Sanofi has the opportunity to opt-in at the time of an IND application.

The companies will alternate serving as the lead development and commercialization organization after Sanofi opts-in to an antibody program.  For programs where Regeneron is the lead, including REGN2810, Regeneron will serve as the U.S. commercial lead, including recording U.S. sales, and the companies will equally fund post-POC development. Sanofi will record sales and serve as the commercial lead for all countries outside the U.S. Sanofi will retain the right to co-promote in the U.S. and Regeneron will retain the right to co-promote outside the U.S.

For programs where Sanofi is the lead, Sanofi will serve as the U.S. commercial lead and fund 100% of post-POC development, with Regeneron reimbursing up to half of such costs through the IO collaboration development balance, which represents the amount of development funding that Regeneron is obligated to repay out of its share of profits as described below. Sanofi will record sales and serve as the commercial lead for all countries outside the U.S. Regeneron will retain the right to co-promote in the U.S. and outside the U.S.

Sanofi and Regeneron will share equally in worldwide profits from sale of collaboration immuno-oncology antibodies.

As in the existing antibody agreement, Regeneron has agreed to repay the immuno-oncology collaboration development balance from its share of overall profits of the immuno-oncology antibodies, in an annual amount equal to 10% of the Regeneron share of profits.

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