mAb money tree

Astellas deal helps Regeneron pile up cash it may need for commercial operations

Not for the first time, Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) translated its VelocImmune antibody discovery technology into a deal that is heavy on guaranteed money. Last week, Astellas Pharma Inc. (Toyko:4053) paid $165 million in cash to extend its non-exclusive licensing arrangement through 2017. The Japanese pharma received an option to pay another $130 million in 2018 to extend the agreement until 2023.

The deal replaces one signed in 2007 in which Astellas agreed to make annual license payments of $20 million through 2012 for non-exclusive rights to the technology, a mouse-based production platform for discovering human mAbs.

The pharma said it has about 20 ongoing mAb development projects using VelocImmune; the biotech is eligible for mid-single-digit royalties on any marketed products that emerge.

Regeneron, which reported its 2Q earnings last week, now expects to end the year with $425-$450 million in cash and marketable securities. The company's burn rate is expected to be $150 million this year.

Regeneron has committed to moving four to five mAbs into the clinic per year under a deal with sanofi-aventis Group (Euronext:SAN; NYSE:SNY), which is paying $160 million in annual research funding in exchange for an exclusive option to co-develop programs emerging from VelocImmune. The pharma has opted in on all five programs it has seen so far and is funding all the development (see BioCentury, Dec. 14, 2009).

Point of sales

Regeneron may also be looking to invest in commercial infrastructure as two programs where it has a direct interest are approaching important Phase III milestones. The company owns U.S. and worldwide rights to VEGF-Trap Eye and Arcalyst

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