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Sanofi, Regeneron Set Sights on Immuno-Oncology With New $2B+ Pact

Xconomy New York — 

Regeneron Pharmaceuticals has risen to prominence in part by working with Sanofi to develop drugs for a number of diseases, most recently high cholesterol. Now the two are trying their hands at biotech’s hottest, and most crowded field, immuno-oncology, through a new wide-ranging deal that will see the two companies jointly invest more than $2 billion altogether.

Tarrytown, NY-based Regeneron (NASDAQ: REGN) will get $640 million up front from Sanofi as part of the pact, which will see the two companies try to develop drugs that spur on the immune system to fight cancer. The two companies will invest $1 billion to develop immuno-oncology antibody drugs—with Regeneron paying $250 million and Sanofi funding the remaining $750 million—from discovery through a proof-of-concept study in humans. They’ll start out each paying an additional $325 million—$650 million total—to push forward Regeneron’s REGN2810, what’s known as a PD-1 inhibitor. That drug is in Phase 1 testing; others are expected to follow into clinical trials next year.

Some other economic terms:

—Regeneron will get a one-time $375 million check if a PD-1 drug or any other antibody that comes out of the deal tops $2 billion in sales over a 12-month period.

—The two companies have taken $75 million from their existing antibody drug collaboration—a deal that’s most recently led to the cholesterol-lowering alirocumab (Praluent), approved by the FDA on Friday—and put it towards their immuno-oncology deal.

—Regeneron will lead discovery and develop the antibodies through proof of concept studies, at which point Sanofi will have the chance to opt in and gain rights to the drugs. In some cases, Sanofi will lead development from there on; in others, Regeneron will.

—The deal lasts five years, though it can be extended for another three years for certain unspecified drug candidates.

While the names are big and the sums of cash here are significant, Sanofi and Regeneron are well behind a number of other companies, large and small, who have been developing drugs that harness the immune system against cancer. There have already been major breakthroughs in the field of immuno-oncology with so-called “checkpoint inhibitors,” antibody drugs that remove a brake that otherwise stops the immune system’s T cells from destroying tumors—the same type of drug as REGN2810. The two approved drugs, Bristol-Myers Squibb’s nivolumab, (Opdivo) and Merck’s pembrolizumab (Keytruda)—have started to change cancer care with impressive results for certain types of patients with skin, lung, and most recently kidney cancer.

Yet even so, these drugs have their limitations, and don’t work for everyone. The same goes for what’s known as CAR-T therapy, a method of genetically engineering a patient’s T cells to kill cancer. CAR-T has produced dramatic results for certain blood cancers, but a lot of work has to be done to figure out how to safely and effectively use the technique for more prevalent solid tumors.

All of which means cancer immunotherapy is still in its early days. That’s led to a frenzied mix and match game, with companies making deals with one another to find the best drugs to pair with checkpoint inhibitors. Startups have cropped up formed with plans to develop drugs for different targets in what’s known as the tumor microenvironment. But science is still a ways away from defeating cancer, despite the hype and progress of immuno-oncology, and that keeps the door open for companies like Regeneron and Sanofi who are trying to make an impact coming from behind. Regeneron chief scientific officer and co-founder George Yancopoulos highlighted the importance of combination approaches going forward in a statement released this morning.

“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,” he said.

That’s the approach a number of companies are taking, of course, so despite their success in other fields, Regeneron and Sanofi will have much to prove here. They said that in addition to PD-1 blockers, they’ll also develop “bi-specific” antibodies, which latch onto two targets instead of one; and drugs that go after other checkpoint targets like LAG3, GITR, and PD-L1.

Sanofi took a roughly 20 percent stake in Regeneron as part of a partnership many years ago, and then turned that work into a complicated, long-term collaboration with the New York company in 2009. The two eyed the goal of putting 20 to 30 antibody products into clinical trials by 2017, and the marriage has paid off with antibody drugs approved for cancer (aflibercept (Zaltrap)) and most recently high cholesterol (alirocumab). Another antibody drug, dupilumab, for allergic conditions like asthma and eczema, is in late-stage testing. (Regeneron is best known for aflibercept in a different form; it’s used for eye diseases under the brand name Eylea.)