Evotec said yesterday it hammered out a definitive agreement for a five-year, minimum-guaranteed €250 million (nearly $270 million) strategic alliance with Sanofi focused on developing multiple products.

The announcement confirms a deal the companies first outlined publicly back in December 2014. Unlike back then, Evotec today disclosed the size of Sanofi’s upfront payment. The pharma giant agreed to pay the German pharmaceutical company €40 million ($43.2 million) as part of the deal.

As disclosed in December, however, Evotec will acquire Sanofi's scientific operations in Toulouse, France. That move is intended to strengthen Evotec’s drug discovery infrastructure and offerings by bringing under the company’s control Sanofi’s approximately 20,000-square-meter (215,278-square-foot) research facility, where more than 200 employees are based.

“We highly value this collaboration, which will reinforce Toulouse Biopark as a major biomedical research platform in Europe and create a field of opportunities for our employees, while contributing to the vitality of the local ecosystem”, Elias Zerhouni, M.D., Sanofi’s president, Global R&D, said in a statement.

The deal with Evotec aligns with recent Sanofi efforts to cut back on internal R&D. Last month, Sanofi confirmed it was shrinking its oncology R&D operations as part of a restructuring that shifted them from a separate “Sanofi Oncology” division to an R&D Strategic Therapeutic Unit reporting directly to Sanofi’s Global R&D operation.

Sanofi has sought to shut down the Toulouse R&D site for years—it was slated for closure as part of a restructuring announced in 2011 by former CEO Christopher Viehbacher, but not carried out following opposition by the administration of French President Francois Hollande.

Viehbacher’s pursuit of operations and job cuts in France, touching off conflicts with labor unions and the country’s labor-friendly government—and was one of several factors in Sanofi’s board ousting Viehbacher last October. The board has approved a successor, Olivier Brandicourt, M.D., who begins his tenure April 2.

Added Evotec CEO Werner Lanthaler, M.D., Ph.D.:This transaction supports our long-term strategic growth plans for our EVT Execute and EVT Innovate segments and brings significant value to Evotec's shareholders without the need for dilutive financing.”

In addition, Evotec will assume management of Sanofi's global screening compound library; and provide a broad range of long-term drug discovery services to the pharma giant, centered on core small-molecule discovery platforms being studied in Toulouse.

Both companies also agreed to combine their libraries of small-molecule compounds and offer them for screening to Evotec's business partners. The combination will make available approximately 1.7 million compounds for screening, according to Evotec.

“The expanded capabilities will serve to support collaborative research in drug discovery from screening to identification of pre-clinical candidates with Evotec's Pharma, biotech, venture capital and academic partners,” Evotec said in the statement.

Evotec added that it will offer an update on March 24 on how its financial projections for 2015 will be affected by the deal with Sanofi.

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