With its back against the wall, Regulus hands over its lead microRNA drug to Sanofi for a small down payment

Just a few weeks after a troubled Regulus Therapeutics $RGLS pulled off a reverse split of its stock, the biotech is handing off its lead drug — now in Phase II — to its partners at Sanofi. And they’re not getting much for it.

Regulus announced Tuesday morning that the company is handing over worldwide rights to RG-012, now in a mid-stage trial for Alport syndrome, for $7 million and a $40 million batch of milestones. The deal for the miR-21 targeting therapy covers all indications. 

That’s not much for a clinical-stage asset, which wrapped the Phase I in May of last year, but Regulus appears eager to take it. The biotech is now off the hook for development costs and gets some additional payments to cover costs. 

Regulus didn’t have much choice in the matter. Struggling to survive, the biotech halted their recruitment activities for the Phase II in July and began another round of deep cuts. The company has reeled from a series of painful setbacks forcing an earlier retrenchment, and they’ve been working on a rewrite of their 8-year-old alliance with Sanofi, which originally came with $750 million in milestones during sunnier times for the microRNA company.

The company stock was buoyed by the sight of cash, with shares surging 21% on the news.

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