Regeneron To Acquire Global Rights To Libtayo From Sanofi For $900 Mln, Plus Royalties

Regeneron Pharmaceuticals, Inc. (REGN) announced Thursday its intent to purchase French drug major Sanofi's (SNYNF,SNY) stake in the Regeneron and Sanofi collaboration on Libtayo (cemiplimab), providing Regeneron with exclusive worldwide development, commercialization and manufacturing rights to the medicine.

Libtayo, which was invented using Regeneron's proprietary VelocImmune technology, is a fully human monoclonal antibody targeting the immune checkpoint receptor PD-1 on T cells. It is a leading and first-in-class PD-1 inhibitor for the treatment of approved non-melanoma skin cancers and is considered a standard of care.

Under the terms of the deal, Sanofi will transfer the rights to develop, commercialize and manufacture Libtayo entirely to Regeneron, on a worldwide basis, over the course of a defined transition period.

Upon closing of the transaction, Regeneron will make an upfront payment of $900 million to Sanofi, which will be entitled to receive an 11% royalty on worldwide net sales of Libtayo. Sanofi will also be entitled to a $100 million regulatory milestone payment upon the first approval by either the FDA or European Commission of Libtayo in combination with chemotherapy for first-line treatment of certain patients with NSCLC, as well as sales-related milestone payments of up to $100 million in total over the next two years.

The transaction is subject to merger control clearance outside the United States and is expected to close in the third quarter of 2022. Once the transaction has closed, Regeneron will record 100% of global net sales and expenses for the Libtayo program.

Pursuant to the agreement, Regeneron will accelerate reimbursement of the development balance associated with Regeneron and Sanofi's separate Antibody Collaboration. Regeneron will increase from 10% to 20% the share of its profits that are paid to Sanofi to reimburse Sanofi-funded development expenses, until Regeneron's share of the total cumulative development costs incurred under the collaboration has been reached.

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