S-A increases stake in Regeneron

French pharmaceutical company, sanofi-aventis is expanding its original 2003 collaboration with US-based biotech Regeneron by increasing its equity stake from four per cent to 19 per cent.

Alongside the increase, S-A is investing USD 872m to augment the company's involvement in biotech research in order to develop drugs for prostate and lung cancers to boost its flagging drug pipeline.

The Regeneron investment will boost research into humanised therapeutic antibodies, which do not cause rejection in patients. S-A could raise the stake to 30 per cent over four years.

The compound under investigation is aflibercept, which is similar to US-based Genentech and Swiss pharma giant Roche's blockbuster cancer drug, Avastin.

Per the deal, S-A will purchase 12 million newly issued shares of Regeneron common stock at USD 26.00 per share for a total of USD 312m. The price is a premium of more than 50 per cent to S-A's closing share price on 28 November.

S-A will make a USD 85m upfront payment to Regeneron and fund up to USD 475m of research until 2012. The company will have an option to extend the research agreement for up to an extra three years and retains the exclusive option to co-develop drug candidate in the collaboration portfolio with Regeneron.

S-A will fund development costs up front, while Regeneron will reimburse 50 per cent of costs from its share of future profits.

The first therapeutic antibody produced from the collaboration to enter clinical development is the Interleukin-6 receptor (IL-6R), which is for the treatment of rheumatoid arthritis (RA). The other cited antibody is the Delta-like ligand-4 (Dll4), which will enter clinical trials in 2008.