Ten-year agreement will see U.S. firm act as sole provider of central laboratory services.

Covance expects to earn $1.1-$2.2 billion from sanofi-aventis as part of the firms’ just announced 10-year R&D partnership, which will also see the U.S.-based drug development services firm buy two sanofi-aventis’ sites in Porcheville (France) and Alnwick (U.K.), for $25 million.

The overall deal means Covance will be the sole provider of central laboratory services for sanofi-aventis over the next 10 years, delivering discovery support, toxicology, chemistry, clinical Phase I-IV central laboratory, and market access services, with incrementally increasing commitments. Chemistry, manufacturing and controls (CMC) services will be provided through the acquired Porcheville and Alnwick facilities, including preformulation, drug formulation, preclinical and early-stage clinical API manufacturing, and radiolabeled chemistry. Covance is also committed to maintaining employment at the two ex-sanofi-aventis sites for at least the next five years.

The agreement represents a “win-win solution to the R&D productivity challenges facing the pharmaceutical industry,” claims Joe Herring, Covance chairman and CEO. “A key strategy for sanofi-aventis is to transform its R&D model and discover new medicines through the use of novel technologies and innovative partnerships,” adds Marc Cluzel, M.D., executive vp of R&D at sanofi-aventis. “This alliance with Covance will help us preserve hundreds of valuable jobs in Porcheville and Alnwick, while driving our R&D efficiency for the benefit of patients.”

Covance generates annual revenues of over $1.8 billion, and has more than 10,000 employees worldwide. The sanofi-aventis deal comes just two days after the Covance board of directors authorized the repurchase of up to $250 million of its outstanding common stock.

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