As part of the research agreement, sanofi-aventis will provide an $85 million down payment to Regeneron and fund up to $475 million in research over the next five years. Sanofi-aventis has the option to extend the research agreement for an additional three years. For each new product successfully developed as part of the cooperation, sanofi-aventis will take the lead in marketing activities and consolidate distribution. Regeneron will have the right to promote all collaboration products worldwide. In the United States, profits are shared equally. Outside the U.S., earnings are spread across a predetermined sliding scale, with Sanofi-aventis` share between 65 and 55 percent. “While Sanofi`s exit will take place earlier than expected (the contract lock-out expires on December 20, 2020 and the liquidation is expected to last several years), we do not believe this will result in a significant disruption to REGN shares,” Geoffrey Porges of SVB Leerink wrote in a statement to investors on Tuesday. Sanofi owns 23.2 million shares of Regeneron, a share of approximately 20%, and plans to sell 12.8 million shares. Regeneron will finance the purchase with $US 3.5 billion in cash and $1.5 billion in bridge financing. The French drug manufacturer first invested in Regeneron in 2004; Since 2003, the two companies have also collaborated on a number of therapies approved by the Food and Drug Administration, including kevzara for the treatment of rheumatoid arthritis, the PCSK9 inhibitor Praluent and the execrable drug Dupixent. Kevzara is currently in clinical trials in which the drug is being tested for the treatment of patients with COVID-19.

“The registered offer and share repurchase will have no impact on the ongoing cooperation between Regeneron and Sanofi,” Regeneron said in a statement. The sale of about 23 million shares of Regeneron could bring in $US 13 billion in cash to Sanofi and push the company to enter into a mid-size biotech deal, analysts at RBC Capital Markets wrote Monday. Year-to-date, Sanofi`s stock has fallen 5.4% and Regeneron shares have risen 54.7%. The S&P 500 SPX +0.05% fell 8.5%. Sanofi-aventis will have the exclusive opportunity to develop each candidate for the active substance in the cooperation portfolio with Regeneron. . . .