FRX Forest Road Acquisition Corp

Sanofi-Aventis (SNY) recently entered into a licensing agreement with Indian company, Glenmark Pharmaceuticals, for the development and commercialization of GBR500.

GBR500 is a first-in-class therapeutic monoclonal antibody, which is being studied for the treatment of Crohn’s disease and other chronic autoimmune disorders like multiple sclerosis. The candidate, which completed a phase I dosing study in the US, was found to be well-tolerated with a decent pharmacokinetic profile. Plans are in place to move the candidate into proof-of-concept studies.

Terms of the Agreement

Per the terms of the agreement, Sanofi will make an upfront payment of $50 million – while $25 million will be paid on the closing of the transaction, the balance payment depends on Sanofi’s assessment of data to be provided by Glenmark. 

In addition to the upfront payment, Sanofi will make payments based on the achievement of development, regulatory and commercial milestones. The upfront and potential milestone payments could reach $613 million. Once products are commercialized under this agreement, Sanofi will pay double-digit royalties on product sales. The deal is scheduled to close in June 2011.

While Sanofi will have exclusive marketing rights in North America, Europe, Japan, Mexico, Argentina, Chile and Uruguay, the company will have co-marketing or co-promotion rights in Brazil, Russia, Australia and New Zealand. Glenmark has retained exclusive marketing rights in India and the rest of the world.

Second Licensing Deal Between Glenmark-Sanofi

The GBR500 agreement is the second agreement between Sanofi and Glenmark. Last year in May, the companies had signed a license agreement for the development and commercialization of treatments for chronic pain. The lead candidate under this agreement is GCR15300 (SAR292833), a first-in-class phase I molecule for the treatment of chronic pain.

While the licensing deal is a boost for Glenmark, we note that GBR500 still has a long way to go before the candidate is successfully developed. Glenmark has previously had licensing agreements with companies like Eli Lilly (LLY) and Forest Labs (FRX).

Neutral on Sanofi

We currently have a Neutral recommendation on Sanofi. The company recently completed its acquisition of biotech company Genzyme Corporation. This acquisition will boost Sanofi’s revenues as well as its pipeline.

 
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