Evotec AG Inherits Sanofi's Troubled Division in €250 Million Long Term Drug Discovery Deal
March 20, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
German drugmaker Evotec AG will acquire a long embattled Sanofi research and development site in Toulouse, France, for $43 million in upfront payments and $270 million in services, as the French company struggles to unload an asset that has been nothing but a headache for the last two years.
Under the terms of the five-year deal, Evotec will now drug discovery services, news which pushed shares of the company up more than 7 percent in morning trading Friday.
"This is a huge deal for Evotec," a local trader told Reuters, pointing out to the news service that because Germany’s own biotech market value is only $540 million, a deal that is half that size could have an enormous impact. Indeed, Evotec itself seemed delighted on Friday.
"We are very excited to welcome our new colleagues to Evotec. We would also like to welcome Sanofi as a new strategic customer and key alliance partner,” said Werner Lanthaler, chief executive officer of Evotec, in a statement. “This transaction supports our long-term strategic growth plans for our EVT Execute and EVT Innovate segments and brings significant value to Evotec's shareholders without the need for dilutive financing."
Sanofi has long sought a way out of the troubled R&D asset, which has been tangled in a lengthy dispute with France’s powerful labor unions over whether or not it may close the plant. It had promised the French government it would keep the location open until 2018, an outcome that now seems likely given its new deal with Evotec to continue operations at the plant.
"Sanofi is pleased to welcome Evotec as a new strategic partner in France. We highly value this collaboration, which will reinforce Toulouse Biopark as a major biomedical research platform in Europe and create a field of opportunities for our employees, while contributing to the vitality of the local ecosystem," said Elias Zerhouni, president of Global R&D for Sanofi.
The new agreement will have the two companies “jointly progress” a portfolio of primarily oncology related projects, including five advanced, pre-clinical projects and further discovery-stage assets, to Investigational New Drug status or other value inflection points.
BioSpace Temperature Poll
After Amgen Inc. said last week that it will close its South San Francisco facility acquired during its $10 billion buyout of Onyx Pharmaceuticals and will lay off 300 of Oynx’s 750 workers, BioSpace is wondering—will the number of mergers and acquisitions completed in 2014 mean a “streamlining” of biotech jobs in the Bay Area? Tell us your thoughts.