Regulus, Sanofi-Aventis Form $750M Partnership

NEW YORK (AP) -- Biotech drugmaker Regulus Therapeutics Inc. said Tuesday it will team up with Sanofi-Aventis SA, one of the world's largest drug companies, in a drug development deal that could be worth more than $750 million.

Regulus and Sanofi-Aventis will work on as many as four drugs that use microRNA, or small RNA molecules that can treat diseases by turning parts of genes on or off. Their first focus will be fibrosis, a group of diseases that cause scarring inside organs.

The deal includes a $25 million upfront payment to Regulus. Sanofi-Aventis will cover all research support costs for the next three years, and will have an option to extend the collaboration for two more years. Regulus could receive payments as the products reach milestones in preclinical and clinical development, and if the drugs are approved, it would get royalties on sales and payments if the drugs reach certain targets.

The partnership also includes a potential $10 million equity investment by Sanofi-Aventis at a price the companies must agree to.

Sanofi-Aventis, which is based in Paris, will have an option to expand its alliance with Regulus. That would lead to payments of another $50 million over three years.

The companies said the entire deal is potentially worth more than $750 million to Regulus if all products are successfully commercialized.

Regulus, based in Carlsbad, Calif., is working on microRNA drugs for hepatitis C, heart disease, fibrosis, cancer, immune and inflammatory diseases, and metabolic illnesses. The company is a partnership between Alnylam Pharmaceuticals Inc. and Isis Pharmaceuticals Inc.

Isis and Alnylam will each get $1.8 million from the upfront payment, and they said they would receive similar portions of any future milestone payments. Regulus will also make about $400,000 in payments to other licensors.

Isis and Alnylam formed Regulus in 2007, and each company owns about half of Regulus shares.

Regulus is also working with British drugmaker GlaxoSmithKline PLC on four potential inflammatory disease treatments. The companies began collaborating in 2008, and in February they expanded their work to include a potential hepatitis C drug. Regulus could get more than $750 million from that partnership.

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