The guaranteed payment will include a “sizeable” upfront cash payment, which an Evotec spokesman refused to elaborate on. The agreement also will include development, regulatory and sales milestones as well as royalties benefiting both parties. Expected to be signed in the first half of 2015, the agreement is still subject to finalization.
The collaboration will comprise three major strategic initiatives all focused on innovation in the drug discovery and pre-clinical development space.
Werner Lanthaler, CEO of Evotec, said in a statement: "This collaboration is a major milestone in the drug discovery space and accelerates Evotec's strategy to become the leading drug discovery partner to the Pharma and biotech industry as well as academia. We will warmly welcome the Sanofi employees to the Evotec Group and look forward to working with them."
The first such initiative will be a pipeline-building collaboration with an initial focus on oncology. Under the agreement, both partners will collaborate on selected pre-clinical development projects, with Evotec accelerating drug discovery projects to the point of pre-clinical development candidates from which point Sanofi may take over the development and commercialisation.
Evotec will also license from Sanofi a portfolio of projects including five advanced pre-clinical projects in oncology that will be progressed to IND (Investigational new drug) jointly by Sanofi and Evotec before potential partnering.
In order to meet capacity needs, Evotec will integrate its nearly 650 scientists with the more than 200 experienced scientists from a Sanofi research site in Toulouse, France.
The integration will occur on the small molecule discovery site. The expanded capabilities will cover the early-stage discovery and pre-clinical process from screening to medicinal chemistry. From this new facility, Evotec will perform collaborative research with its pharma, biotech and academic partners as well as its own internal oncology research.
Evotec also will assume management of Sanofi's global screening compound library as well as provide a broad range of drug discovery services for Sanofi for the period of the contracts.
In addition, Sanofi and Evotec plan to combine their compound libraries to make them available for screening to Evotec's partners. The Sanofi library, established on its Toulouse site with over 1,000,000 compounds, will expand Evotec's own corporate library of more than 400,000 compounds.
Evotec will screen the libraries against collaborators' and partners' targets under pre-agreed terms from which Sanofi will receive a contribution if a product is developed from a library hit.
The strategic partnership comes as Evotec has acquired two companies in 2014: a UK-based specialist CRO focusing on anti-infective drug discovery services for $5m, and an academic asset-management specialist.