SanofiSNY has exercised its option to develop an antigen-specific immunotherapy, the second therapeutic program with Selecta Biosciences, based on the latter's synthetic vaccine particle technology, for the treatment of celiac disease.
We remind investors that in Nov 2012 the companies signed a collaboration agreement for the discovery of highly targeted, antigen-specific immunotherapies for life-threatening allergies. Per the agreement, Sanofi gained the first exclusive license to develop an immunotherapy for acute immune responses against a life-threatening food allergen and the option to develop two additional candidate immunotherapies for allergies and celiac disease.
Sanofi will make payments of up to $300 million to Selecta Biosciences upon the achievement of development, regulatory and sales milestones in the program for celiac disease. Additionally, Sanofi will pay up to double-digit tiered royalties to the latter as a percentage of net sales of any product developed and commercialized under the collaboration. We note that Sanofi holds worldwide commercialization rights to products that will be developed under the collaboration.
Additionally, Sanofi has an agreement with Selecta Biosciences and JDRF for novel antigen-specific immunotherapies for the treatment of type I diabetes.
We note that Sanofi's diabetes franchise is currently under significant pressure with its flagship product in this segment - Lantus - facing pricing pressure in the U.S. Moreover, Lantus is expected to face biosimilar competition in the EU in 2015. In the first quarter of 2015, diabetes franchise sales were down 3.2% to €1.8 billion, reflecting lower Lantus sales in the U.S.
Sanofi carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Actelion Ltd. ALIOF , Gilead Sciences Inc. GILD and Acorda Therapeutics, Inc. ACOR . While Actelion and Gilead carry a Zacks Rank #1 (Strong Buy), Acorda holds a Zacks Rank #2 (Buy).
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