Sanofi expands Regeneron partnership with up to $8 billion deal in win for new CEO

Oct 1 (Reuters) - Sanofi and US partner Regeneron on Thursday said they would expand their partnership to develop four new drugs, in a deal that includes up to $7 billion in milestone payments.

Sanofi will pay Regeneron $1 billion upfront, with additional payments tied to development, regulatory and commercial milestones being met.

Sanofi shares rose 2% in early trading.

The deal also settles litigation between the partners and addresses some investor concerns around Dupixent, their blockbuster eczema drug, which is set to lose patent protection in 2031.

The agreement marks an early win for Sanofi's new chief executive, Belen Garijo, who took the top role in May and is leading a strategic review of the company. She has promised investors faster decision-making.

"While the assets are early-stage, the expansion should be viewed positively, as it signals the new CEO's proactive focus on the most important yet addressable uncertainties investors face, as well as the speed of progress," said Jefferies analyst Michael Leuchten.

Barclays analysts noted that Garijo's predecessor, Paul Hudson, had previously tried but failed to expand the partnership.

The companies said they will share development and commercialisation costs for the new drugs and will equally split future profits from these potential products.

The four antibody drugs under the deal target the same type 2 inflammation pathways as Dupixent and include REGN20423, which is currently in early stage testing for atopic dermatitis.

The other three treatments are expected to begin clinical testing in 2027.

Regeneron will lead research and development and Sanofi will lead global sales efforts as part of the expanded agreement, and the existing Dupixent profit-sharing terms will not change.

Regeneron will also have the option to join Sanofi's experimental drug lunsekimig once its late-stage trials for chronic obstructive pulmonary disease are completed.

(Reporting by Hugo Lhomedet and Matthieu Huchet in Gdansk, Bhanvi Satija in London, editing by Milla Nissi-Prussak and Louise Heavens)