Regeneron to Buy Sanofi’s Stake in Libtayo for $900M Upfront

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Regeneron Pharmaceuticals announced intentions to acquire Sanofi’s stake in a drug they developed together, Libtayo (cemiplimab). The drug is a fully human monoclonal antibody that targets the PD-1 checkpoint receptor. 

To date, the drug has been approved in more than two dozen countries, including the U.S., as a monotherapy for advanced basal cell carcinoma (BCC), advanced cutaneous squamous cell carcinoma (CSCC) and advanced non-small cell lung cancer (NSCLC). It is generally viewed as the standard of care for the treatment of approved non-melanoma skin cancers.

Regulators are reviewing the drug in the U.S. and Europe as a combination treatment with chemotherapy for first-line therapy in advanced NSCLC. Libtayo is also being evaluated in 22 clinical trials with 18 investigational compounds for various difficult-to-treat cancers.

“This strategic acquisition is a major step towards Regeneron’s goal of becoming a global oncology leader, centered on Libtayo as an important choice in settings where PD-1 inhibitors can be used as monotherapy and, excitingly, in potential new combinations with our differentiated and diverse pipeline of oncology assets,” Dr. Leonard S. Schleifer, M.D., Ph.D., president and CEO of Regeneron said.

Schleifer added, “In 2021, Libtayo was approved for two new monotherapy indications in the U.S. and EU and global net product sales increased 32% year-over-year, providing a strong foundation for our multi-faceted oncology strategy and helping to maximize the potential value of our pipeline.”

The two companies inked the original immuno-oncology deal in 2015. Up to this deal, they split the drug’s global operating profits equally and co-commercialized the drug in the U.S., while Sanofi handled sales and marketing outside the U.S.

Under this acquisition deal, Regeneron is paying Sanofi $900 million upfront. Sanofi will be eligible for an 11% royalty on global net sales. Sanofi will also be up for a $100 million regulatory milestone, once the drug is approved by either the U.S. Food and Drug Administration or the European Commission for the chemotherapy-combo for first-line treatment of NSCLC. Sanofi will also be eligible for sales-related milestones of up to $100 million over the next two years.

For 2021, Regeneron reported $306 million in Libtayo sales for the year, up 13% from $271 million in 2020. That pales to another of the two companies’ collaboration drugs, Dupixent, which recorded $1.77 billion in the fourth quarter of 2021 alone, and about $5.6 billion for the year.

In 2020, Regeneron bought back about $5 million of its shares directly from Sanofi. At the time, Sanofi owned about 23.2 million shares of Regeneron common stock, an approximately 20.6% stake. The two companies have collaborated since 2003. Regeneron was viewed as Sanofi’s “innovation engine” for quite some time.

On May 31, the FDA accepted the two companies’ Dupixent (dupilumab)’s supplemental Biologics License Application (sBLA) for priority review. The indication is for prurigo nodularis, a chronic inflammatory skin disease. A decision is expected by September 30, 2022. The drug is a fully human monoclonal antibody that inhibits interleukin-4 and interleukin-13 pathways. The drug is approved for various indications in more than 60 countries, including the U.S., Europe and Japan. It is approved for atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyposis and eosinophilic esophagitis.

As part of the acquisition of Libtayo rights, Regeneron plans to speed the reimbursement of the development balance associated with the two companies’ separate Antibody Collaboration. Regeneron will jump from 10% to 20% of the share of its profits paid to Sanofi to reimburse Sanofi’s part of the development expenses until Regeneron’s share of the total costs has been reached.

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