Date: 2015-03-20
Type of information: Collaboration agreement
Compound:
Company: Sanofi (France) Evotec (Germany)
Therapeutic area: Cancer - Oncology - Technology - Services
Type agreement: collaboration
Action mechanism:
Disease:
Details: * On December 2, 2014, Evotec and Sanofi announced that they have entered into exclusive negotiations on a major multi-component strategic alliance over the next five years. The collaboration will comprise three major strategic initiatives all focused on improving innovation effectiveness in the drug discovery and pre-clinical development space and cement Evotec’s position as the leading drug discovery collaboration partner to the Pharma and biotech industry as well as academia. The collaboration will result in a minimum guaranteed commitment from Sanofi to Evotec of € 250 m over the next five years, including a sizeable upfront cash payment that will be defined in the agreement. It will include a co-development agreement with associated upfront, development, regulatory and sales milestones as well as royalties benefiting both parties. This multi-component transaction is expected to be signed in the first half of 2015, subject to finalization of definitive agreements and completion of the appropriate social process. 2. Outsourcing alliance including acquisition of Sanofi’s drug discovery operations in Toulouse to build an European centre of excellence for compound management and drug discovery services. In order to meet its strategic capacity needs, Evotec will expand its industry-leading capabilities in integrated drug discovery of currently approx. 650 scientists by integrating a state-of-the-art scientific and technological facility which has more than 200 highly qualified and experienced scientists from the Sanofi research site in Toulouse, France. Evotec will integrate the Toulouse capacities, which is a highly productive small molecule discovery site, into its global drug discovery platform. The expanded capabilities will cover the early-stage discovery and pre-clinical process from screening to medicinal chemistry. From this new facility, Evotec will perform collaborative research with its Pharma, biotech and academic partners as well as its own internal oncology research. Evotec will assume management of Sanofi’s global screening compound library as well as provide a broad range of drug discovery services for Sanofi for the period of the contracts. 3. Pioneering open innovation by offering combined libraries. In a ground-breaking initiative within the industry, Sanofi and Evotec plan to combine their libraries to make them available for screening to Evotec’s partners. The Sanofi library, established on its Toulouse site with over 1,000,000 compounds, will expand Evotec’s own corporate library of more than 400,000 compounds, thus creating a very large and valuable source of starting points for drug discovery. Evotec will screen the libraries against collaborators’ and partners’ targets under pre-agreed terms from which Sanofi will receive a contribution if a product is developed from a library hit. This initiative further consolidates Evotec’s position as the leading provider of screening services in the industry.
The alliance, upon completion, will cover three major strategic initiatives:
1. Pipeline-building collaboration with initial focus on oncology
Under the agreement, both partners will collaborate on selected preclinicaldevelopment projects with a focus on oncology and potential Cure X/Target X initiatives. Evotec will typically accelerate drug discovery projects to the point of pre-clinical development candidates (“PDC”) from which point Sanofi may take over the development and commercialisation. Evotec will license from Sanofi a portfolio of projects including five well-advanced pre-clinical projects in oncology that will be progressed to IND
Evotec will continue to expand its Cure X/Target X business model to leverage scientific expertise and a broad portfolio of drug development services to capitalise on the most promising science from French and European academia. Sanofi will fund this initiative through a commitment to Evotec’s scouting strategy over the period of the agreements. Sanofi could provide support to individual projects that will be progressed through this academic bridge programme.
Financial terms: The collaboration will result in a minimum guaranteed commitment from Sanofi to Evotec of € 250 m, including more than € 40 m upfront cash payment.
Latest news: * On March 20, 2015, Evotec announced that a definitive agreement for a major multi-component strategic alliance over the next five years has been signed with Sanofi. The transaction is expected to close on 31 March 2015. This successfully concludes the exclusive negotiations for a major multi-component strategic collaboration which the two companies entered into on 02 December 2014. The five-year agreement includes initiatives with both of Evotec’s two business segments (EVT Execute and EVT Innovate). Capacity and capability expansion: Following its strategic growth plans, Evotec will expand its industry-leading capabilities in drug discovery by integrating a state-of-the-art facility of approx. 20,000 m2 and more than 200 highly qualified and experienced employees in Toulouse, France. Evotec will integrate the Toulouse capacities into its global drug discovery infrastructure and offering. 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. Strategic outsourcing agreement: Evotec will provide a broad range of long-term drug discovery services to Sanofi. This agreement is centred on the core small-molecule discovery platforms in Toulouse for the period of the contract over the next five years. In addition, Evotec will assume management of Sanofi’s global screening compound library. Offering of joint small-molecule libraries: In a first-in class, ground-breaking ‘open innovation initiative’, both companies will combine their libraries and offer them for screening to Evotec’s business partners. This creates one of the largest and most valuable sources of starting points for drug discovery with approx. 1,700,000 compounds available to screen. Pipeline-building initiative in oncology: The definitive agreement defines the conditions under which Evotec and Sanofi intend to jointly progress a portfolio of primarily oncology related projects, including five advanced, pre-clinical projects and further discovery-stage assets, to IND status or other value inflection points before partnering them.
French academic bridge: Sanofi and Evotec aim at further energising and accelerating the translation of excellent science from academic institutions to Pharma. In a joint effort, Evotec will scout and incubate projects generated in France into the pipeline of Evotec’s Cure X/ Target X strategy.
Given the complexity of the transaction and the nature of some of the consideration, Evotec’s financial guidance will only be updated after careful consideration with the auditors. An update of how the transaction will impact the financial projections of Evotec will be given at Evotec’s year-end presentation for 2014 on 24 March 2015.
