Sanofi-Aventis bolstered its drug pipeline by buying eye disease specialist Fovea and expanding its cancer portfolio with an exclusive cancer drug development deal with US biotech Merrimack Pharmaceuticals. The two biotechnology agreements on Thursday are part of the French drugmaker's strategy to strike partnerships to find new drugs and conduct take-overs of up to 15 billion euros to offset a looming loss in sales as some of its key drugs lose patent exclusivity.
Sanofi is entering a new disease area with its take-over of Fovea for up to 370 million euros and is strengthening its foothold in the growing market of monoclonal antibodies with a potentially $530 million price for Merrimack's cancer candidate. "The acquisition of Fovea ... is a further step in our company's goal to focus on new approaches to strengthen our R&D portfolio," Chief Executive Chris Viehbacher said in a statement, calling ophthalmology a "dynamically growing market".
Sanofi shares rose 0.7 percent, outperforming the DJ Stoxx health index's 0.2 percent slip. The stock has gained more than 11 percent this year. Analysts said the agreements accorded with what Viehbacher said he would do after moving from GlaxoSmithKline to take the helm at Sanofi in December, to replenish its pruned pipeline and steer the company through a set of tough years.
"At least on paper these deals are good. What they will ultimately bring we need to wait and see," Societe Generale analyst Rodolphe Besserve, said, as the two agreements involve drugs mostly at the early stages of testing. "They are in line with Viehbacher's plan to diversify the company's disease areas, to find niche products that add value, and to expand in biotechnology-based products, in monoclonal antibodies, where the previous management was too reticent."
The price tag on Sanofi's deal to develop Merrimack's MM-121, a human monoclonal antibody targeting solid tumours that is in early-stage or Phase I clinical trials, was quite expensive, Besserve said. Under the agreement, Sanofi agreed to pay Merrimack an upfront cash payment of $60 million for the research, development, manufacturing and marketing rights.
Merrimack could also receive development and regulatory milestone payments of up to $410 million on MM-121 as well as royalties on world-wide product sales. It will also receive performance milestone payments of as much as $60 million on world-wide sales.
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