Item 1.01.
Entry into a Material Definitive Agreement.
On January 2, 2018, Regeneron Pharmaceuticals, Inc. (
Regeneron
or the
Company
) and Sanofi Biotechnology SAS (
Sanofi
) entered into an Amended and Restated Immuno-oncology Discovery and Development Agreement (the
Amended IO Discovery Agreement
), which amended and restated that certain Immuno-oncology Discovery and Development Agreement, dated as of July 1, 2015 and executed as of July 27, 2015, by and between the Company and Sanofi, as amended (the
Original IO Discovery Agreement
). The Amended IO Discovery Agreement has an effective date of December 31, 2018.
Pursuant to the Amended IO Discovery Agreement, the scope of the existing discovery and development activities conducted by the Company (the
IO Development Activities
) has been narrowed to developing therapeutic bi-specific antibodies targeting (i) BCMA and CD3 (the
BCMAxCD3 Program
) and (ii) MUC16 and CD3 (the
MUC16xCD3 Program
) through clinical proof of concept. The Amended IO Discovery Agreement provides for Sanofis payment of $462 million to the Company as consideration for (x) the termination of the Original IO Discovery Agreement, (y) the prepayment for certain IO Development Activities regarding the BCMAxCD3 Program and the MUC16xCD3 Program, and (z) the reimbursement of costs incurred by the Company under the Original IO Discovery Agreement during the fourth quarter of 2018. The Company is required to conduct the IO Development Activities with respect to (i) the BCMAxCD3 Program through the earlier of clinical proof of concept or the expenditure of $70 million (the
BCMAxCD3 Program Costs Cap
) and (ii) the MUC16xCD3 Program through the earlier of clinical proof of concept or the expenditure of $50 million (the
MUC16xCD3 Program Costs Cap
) (the BCMAxCD3 Program Costs Cap and MUC16xCD3 Program Costs Cap, collectively, the
Program Costs Caps
); provided that under certain circumstances, Sanofi will have the option to increase the MUC16xCD3 Program Costs Cap to $70 million by making a payment to the Company in the amount of $20 million. Pursuant to the Amended IO Discovery Agreement, the Company will be primarily responsible for conducting the IO Discovery Activities and, other than certain clinical trials that may be funded separately by Sanofi, will design and conduct all research activities, including antibody development, preclinical activities, toxicology studies, manufacture of preclinical and clinical supplies, filing of Investigational New Drug Applications, and clinical development through proof of concept. The Company is obligated to reimburse Sanofi for half of the development costs that are attributable to clinical development of antibody product candidates under the Amended IO Discovery Agreement from its share of future profits to the extent they are sufficient for this purpose. As the scope of the IO Development Activities has been limited, the exclusivity obligations of the parties under the Amended IO Discovery Agreement have been narrowed.
The Amended IO Discovery Agreement provides that Regeneron retains exclusive rights to all other immuno-oncology programs that were part of the Original IO Discovery Agreement; provided that Sanofi will receive a royalty on global sales of two product candidates currently in clinical development, REGN3767 (antibody to LAG-3 protein) and REGN4659 (antibody to CTLA4).
With regard to the BCMAxCD3 Program and the MUC16xCD3 Program, when clinical proof of concept is established, the applicable Program Costs Cap is reached, or in certain other limited circumstances, Sanofi will have the option to license rights to the product candidate and other antibodies targeting the same targets for immuno-oncology indications pursuant to the Immuno-oncology License and Collaboration Agreement, dated as of July 1, 2015, by and between the Company and Sanofi, as amended. If Sanofi does not exercise its option to license rights to a product candidate, the Company will retain the exclusive right to develop and commercialize such product candidate and Sanofi will receive a royalty on sales. Pursuant to the Amended IO Discovery Agreement, the parties agreed that (i) if Sanofi exercises its option with respect to a BCMAxCD3 Program antibody, Sanofi will lead the development and commercialization of such BCMAxCD3 Program antibody; and (ii) if Sanofi exercises its option with respect to a MUC16xCD3 Program antibody, (x) the Company will lead the development of such MUC16xCD3 Program antibody and commercialization of such MUC16xCD3 Program antibody within the United States and (y) Sanofi will lead the commercialization of such MUC16xCD3 Program antibody outside of the United States. The Amended IO Discovery Agreement will terminate as of the earlier of (a) Sanofi having elected to exercise or not exercise its options with respect to the BCMAxCD3 Program and the MUC16xCD3 Program in accordance with the terms of the Amended IO Discovery Agreement and (b) December 31, 2022.
The Amended IO Discovery Agreement contains other customary covenants and termination provisions, including for material breach by the other party.
2