Immuno-oncology drug Libtayo is Regeneron Pharmaceuticals’ main cancer asset, a product that is marketed under an alliance with Sanofi for treating lung and skin cancers. Regulatory decisions in multiple markets later this year could further expand the drug’s use as a first-line lung cancer treatment alongside with chemotherapy. As growth prospects for Libtayo loom, Regeneron wants all of those economic benefits and the company has agreed to pay Sanofi $900 million to regain full global rights to the partnered drug.
According to the initial agreement struck in 2015, Regeneron and Sanofi share in the U.S. commercialization of Libtayo while Sanofi handles commercialization outside of the U.S. Global profits from Libtayo sales are split equally. The terms of the new agreement announced Thursday call for Sanofi to transfer global rights to Regeneron. The pharmaceutical giant will receive an 11% royalty on worldwide sales of the drug, plus milestone payments. The first $100 million milestone is tied to Libtayo achieving regulatory approval, either in the U.S. or Europe, as part of a combination with chemotherapy as a first-line therapy for certain patients with non-small cell lung cancer. Sanofi could receive up to $100 million more pegged to sales milestones over the next two years.
Libtayo was initially developed in Regeneron’s labs. The antibody blocks PD-1, a checkpoint protein on T cells that keeps them from recognizing and targeting cancer cells. First approved in 2018, its FDA authorized indications span advanced basal cell carcinoma, advanced cutaneous squamous cell carcinoma, and advanced non-small cell lung cancer. Libtayo accounted for $458.2 million in worldwide sales in 2021, a 31% increase over the prior year. But the drug trailed others in its class in reaching the market. Merck, Bristol Myers Squibb, and Roche each have blockbuster checkpoint inhibitors approved for a slew of indications, so Libtayo has some catching up to do.
In an investor presentation, Regeneron said that securing full control of Libtayo will give the company flexibility with the asset, speeding up decision-making and development timelines. That control extends to plans to explore combination treatments with Libtayo, including potential pairings with drug candidates in the Regeneron pipeline.
“This strategic acquisition is a major step towards Regeneron’s goal of becoming a global oncology leader, centered on Libtayo as an important choice in settings where PD-1 inhibitors can be used as monotherapy and, excitingly, in potential new combinations with our differentiated and diverse pipeline of oncology assets,” Regeneron CEO Leonard Schleifer said in a prepared statement.
A recent M&A deal signals one combination that Regeneron is exploring. In April, Regeneron agreed to pay $250 million to acquire Checkmate Pharmaceuticals, a clinical-stage biotech whose lead program, vidutolimod, is a locally administered immunotherapy intended to activate the innate immune system to fight tumors. In addition to research as a monotherapy, Checkmate had also explored potential combinations of its asset with checkpoint inhibitors, including Libtayo.
In the investor presentation, Regeneron said that a Libtayo/vidutolimod combination study is projected to produce data in 2024. Another combination study already underway is evaluating the pairing of Libtayo and REGN5678, an antibody drug in development for treating advanced prostate cancer. A data readout from that study is expected in the second half of this year. External partnerships for Libtayo include tests of the drug in combination with assets from Inovio, Vyriad, Replimmune, and BioNTech, among others.
Regeneron’s relationship with Sanofi includes an antibody collaboration that yielded the blockbuster drug Dupixent, among other products. That alliance requires Regeneron to reimburse Sanofi for its development costs associated with the partnered drugs. According to deal terms announced Thursday, Regeneron will accelerate the repayment of this balance, which was $3.1 billion as of the end of March.
Photo: Mohammed Haneefa Nizamudeen, Getty Images