Sanofi is negotiating with German biotech Evotec on the creation of a €250m-plus strategic alliance that would focus on drug discovery, with a particular focus on cancer.
The two companies said they “expect to sign the transaction” in the first half of next year, noting that a key component would be the takeover by Evotec of Sanofi’s Toulouse R&D operations, which had been threatened with closure in 2012 but were rescued after pressure from the French government.
The Toulouse operation will become Evotec’s primary drug discovery and compound management centre – swelling its staff from 650 at present to around 900 – and would provide services to Sanofi on an outsourced basis.
In effect, Evotec will take over the management of Sanofi’s one million-compound screening library and combine it with its own portfolio of around 400,000 compounds. Evotec has also committed to maintaining the Toulouse site’s headcount until 2019.
The strategic-level agreement is reminiscent of Eli Lilly’s decision to sell its R&D operations in Greenfield, Indiana, to contract research organisation (CRO) Covance in 2008, with the deal including a 10-year, $1.6bn agreement to provide drug development services.
Other elements of the alliance include the creation of a French ‘academic bridge’ programme, with Evotec scouting out promising research projects with funding from Sanofi. The German biotech will also license a portfolio of preclinical projects in oncology from Sanofi that will be developed jointly to the clinical trial stage.
Sanofi – which recently ousted former chief executive Chris Viehbacher – has, like its peers in the pharma sector, been restructuring its R&D operations in an effort to improve productivity and rein in costs, although its efforts in France have been hampered by the involvement of government and the powerful French trade unions.
Should the agreement with Evotec go ahead, the French pharma giant could pass on the political issue with the possibility of improving its drug discovery and pre-clinical development effectiveness.
“Our collaboration will secure the future for our employees in Toulouse and importantly accelerate our pipeline productivity”, said Elias Zerhouni, Sanofi’s R&D chief.