Deals, Licensing

Sanofi is jettisoning its infectious disease unit to Evotec — handing over cash, staff and a pipeline

Sanofi is spinning out its infectious disease research unit to Evotec, the German contract development organization known for its deal savviness. And the Paris-based pharma giant $SNY — suffering from a long drought that has blighted its internal R&D ops — is handing over €60 million (around $74 million) upfront for the operation along with continued financing, 10 experimental infectious disease projects and 100 of its staffers to get it all going.

Werner Lanthaler

A new innovation platform will open near Lyon, France. Evotec will run the place, but the pharma partner retains options to develop and commercialize any potential product candidates. Sanofi’s big vaccine unit, however, is staying strictly out of it.

Any organization interested in infectious disease drug development, ranging from academia, biotech/pharma companies, foundations to government agencies, are welcome to collaborate.

“Finding a way to motivate more public funding and academic initiatives for the progress of novel anti-infectives on Evotecs’ platform will be a key success factor for this initiative,” said Evotec CEO Werner Lanthaler in a statement.

Elias Zerhouni

Evotec is also bringing its own team to the Lyon platform. More than 150 of its scientists will be active in this expanded drug discovery and development effort. Anti-infectives are one of five core therapeutic areas Evotec lists as its main expertise, having acquired infectious disease specialist CRO Euprotec back in 2014.

Under the agreement, which is expected to complete in a few months, Sanofi will provide “significant further long-term funding” to support the growth of the portfolio, though numbers were not specified.

These kinds of job swapping events aren’t all that unusual in biopharma. GSK transferred a large group of staffers to a CRO when it reorganized its research group in North Carolina — which subsequently laid off employees. Takeda has been doing the same thing while AstraZeneca and others have spun out companies and drugs to startups as they revamped and refocused internal operations.

Sanofi tried to downsize its French R&D operations under former CEO Chris Viehbacher, but the unions allied with government officials managed to prevent much of the restructuring that was planned. This time, Sanofi isn’t even hinting at layoffs, noting that they are providing all departing staffers with 5-year employment contracts.

It’s no coincidence that Sanofi also closed on its $11.6 billion deal to acquire Bioverativ today. The buyout gives Sanofi revenue from existing hemophilia drugs, and a pipeline of new therapies to contend with. That deal virtually coincided with a pact to acquire Ablynx and its antibody platform, finally delivering on a longterm promise to buy in new assets.

R&D chief Elias Zerhouni said the deal doesn’t mean that Sanofi is giving up on infectious disease:

Sanofi has a long and established history in the fight against infectious diseases, and we remain committed to addressing global health challenges through our development efforts and vaccines. Research in the field of anti-infectives is an area where building critical mass through partnering is particularly important. This new French based open innovation center will benefit from the high quality science ecosystem.

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