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Regulus Inks miRNA Drug R&D Deal with Sanofi-Aventis Worth up to $750M

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By Doug Macron

Regulus Therapeutics, the microRNA drug joint venture of Alnylam Pharmaceuticals and Isis Pharmaceuticals, announced this week that it has forged a drug-development alliance with Sanofi-Aventis potentially worth more than $750 million.

The deal gives Sanofi-Aventis the rights to develop and sell four therapeutics based on Regulus' technology, including its program in fibrosis. It also adds another notch to the miRNA shop's partnership belt, following a pair of deals inked with GlaxoSmithKline.

"This new alliance is … indicative of the level of interest across the industry for new approaches to develop innovative medicines that have the potential to transform the treatment of human disease," Alnylam CEO John Maraganore said during a conference call held to discuss the arrangement. "At its core, this new alliance … is a testament to the extraordinary opportunity represented by microRNA therapeutics."

“This new partnership continues to illustrate Sanofi-Aventis’ commitment to develop innovative therapies," Marc Cluzel, executive vice president of research and development at Sanofi-Aventis, said in a statement. “Together with Regulus, we will develop therapeutics which could potentially open a new paradigm in the treatment of major diseases and could offer an attractive new therapeutic approach for patients."

"The goal of the alliance is to advance a steady stream of microRNA clinical candidates with multiple investigational new drugs into the clinic," Regulus President and CEO Kleanthis Xanthopoulos said during the conference call.

Specifically, Sanofi-Aventis has received the worldwide, exclusive rights to use Regulus' technology and know-how to discover, develop, and commercialize miRNA drugs, including a fibrosis treatment targeting miR-21.

In exchange, Regulus will receive an up-front fee of $25 million, as well as a future equity investment of $10 million that is subject to "mutual agreement on company valuation, Regulus said.

Regulus is also entitled to annual research funding for three years, with Sanofi-Aventis having the option to extend the arrangement for two additional one-year periods. Regulus also stands to receive preclinical, clinical, and commercialization milestones related to collaboration targets, and royalties on miRNA drugs sold by its new partner.

This funding, Xanthopoulos said, extends Regulus' estimated cash runway for several years.

"We started this year with roughly $30 million in cash," he said. "With the execution of this alliance, we have greater than $60 million," while the exercise of the equity investment would boost this position to over $70 million.

Sanofi-Aventis has further agreed to fund 100 percent of the costs related to clinical development and commercialization of the drug candidates covered under the deal.

At the end of the alliance's initial three-year term, Sanofi-Aventis has the option to acquire access to Regulus' technology platform and a limited number of product licenses in exchange for a $50 million payment.

Should the technology alliance option be exercised, Regulus has certain opt-in rights to participate in the development and commercialization of Sanofi-Aventis' future clinical miRNA programs. Regulus will also receive milestone payments and royalties on products developed using its technology under the option.

Given their equal joint ownership of Regulus, Alnylam and Isis are entitled to each receive 7.5 percent of all milestones and royalties paid to their joint venture.

The advancement of the miRNA field "has not escaped the attention of pharmaceutical partners looking to develop high-impact medicines," Xanthopoulos added during the call.

He was specifically referring to his company's two deals with GlaxoSmithKline. The first, signed in 2008, gave GlaxoSmithKline the option to license product candidates directed at four different microRNA targets related to inflammatory disease in exchange for $20 million up front and up to $144.5 million in development, regulatory, and sales milestones, as well as royalties (GSN 4/17/2008). The second, consummated earlier this year, centers around developing miRNA-targeting drugs against miR-122, with an initial focus on hepatitis C (GSN 2/25/2010).

The deal with Sanofi-Aventis is "a very strong sign of the pharmaceutical industry's interest in the field of microRNA-based therapeutics, and … is another demonstration of big pharma's strategy to innovate through partnerships with breakthrough companies," Xanthopoulos noted.

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