Washington Editor

Regeneron Pharmaceuticals Inc. is receiving $25 million up front and another $40 million in milestones per terms of an expanded agreement with Sanofi-Aventis Group.

Their relationship relates to the protein vascular endothelial growth factor (VEGF), and more specifically, the VEGF Trap product born of Regeneron's research efforts into blocking growth factors. The amended collaboration now includes Japan, meaning the partners jointly will develop and commercialize the VEGF Trap throughout the world in all indications save for intraocular delivery to the eye, an application that Regeneron is moving forward on its own.

"Our relationship with Sanofi-Aventis has been extraordinarily productive because of the combined efforts of our respective research and development groups," said Murray Goldberg, Regeneron's chief financial officer, "and we perceive that we have very strong support from the management team of Sanofi-Aventis, which is clearly crucial to our confidence in jointly moving this program forward as rapidly as we can."

He told BioWorld Today that the connection is so strong that Tarrytown, N.Y.-based Regeneron turned away other suitors that offered more money to stick with Sanofi-Aventis across the board, a decision that will allow for more "integrated" development, manufacturing and commercial efforts as the VEGF Trap advances. The Japanese rights opened up because a prior deal covering that territory recently expired.

In exchange for the deal's expansion, Regeneron will receive $25 million in up-front money, potential milestone payments of up to $40 million related to approvals in Japan and royalties worth about 35 percent on VEGF Trap sales in that territory. Paris-based Sanofi-Aventis will lead and fund all development there.

In total, terms of the amended agreement could give Regeneron up to $400 million in total milestones, which includes up to $360 million related to the VEGF Trap's regulatory approval in the U.S. and Europe. In addition, the companies would share equally in all VEGF Trap profits outside Japan. Sanofi-Aventis is responsible for funding the program's worldwide development costs, although after commercialization begins, Regeneron is obligated to reimburse Sanofi-Aventis for half of those development costs out of its share of VEGF Trap profits and Japan royalties. (See BioWorld Today, Sept. 9, 2003.)

Preclinical studies have shown the VEGF Trap blocked the action of the angiogenesis-triggering growth factor for normal tissue and organ growth and also the abnormal growth of new blood vessels surrounding tumors. That mechanism positions it as a potential competitor to Avastin (bevacizumab), a VEGF inhibitor that received FDA approval almost two years ago for metastatic colorectal cancer. Its developer, South San Francisco-based Genentech Inc., has its sights set on broad applicability in the oncology space.

That potential clearly isn't lost on Regeneron and Sanofi-Aventis, neither of which has disclosed specific areas of focus on which the VEGF Trap program is centered.

"[Sanofi-Aventis] has both the expertise and the resources," Murray said, "to test all these things simultaneously - various indications, various doses, single-agent and combinations - more than we could afford to do at the same time if we were relying on our own resources."

The VEGF Trap has been in a Phase I program that includes testing of the intravenous product as monotherapy and in combinations (in one case with the chemotherapies oxaliplatin, 5-fluorouracil and leucovorin, also known as FOLFOX4). Earlier this year, the partners announced plans to rapidly ramp up clinical development in the coming year to include up to 19 more studies, including six new efficacy and safety trials and up to 10 more to be conducted by the National Cancer Institute. Goldberg said the aggressive program speaks to "Sanofi's commitment, interest, confidence and hopes for the VEGF Trap as a potentially important new product in oncology." (See BioWorld Today, Sept. 27, 2005.)

Presently, Regeneron is responsible for manufacturing the product for its studies, and Sanofi-Aventis ultimately will assume manufacturing for commercial supplies.

Regeneron's VEGF Trap program for wet age-related macular degeneration is moving forward, as well, with a Phase I study under way to evaluate direct injections into the eye. The company plans to soon begin enrolling patients in a Phase II trial and eventually plans to seek a partner before moving into Phase III. Any systemic deliveries to the eye would be covered under the Sanofi-Aventis commitment, though nothing is moving forward in that area now.

Its Trap technology also has been used to create other therapeutic candidates through its blocking actions, including the Interleukin-1 (IL-1) Trap for CIAS1-associated periodic syndrome (CAPS), a family of autoinflammatory diseases for which there are no approved therapies. A pivotal study in that indication is expected to begin in the near term. The company also has programs for IL-1 Trap in rheumatoid arthritis and a dual IL-4/IL-13 Trap program for asthma and allergy.

On Thursday, Regeneron's stock (NASDAQ:REGN) gained 76 cents to close at $12.86.