<< Previous Story----Next Story >>

Increasing its bet on biotechnology, Sanofi-Aventis said it would pay an additional $1 billion over eight years to Regeneron Pharmaceuticals for the discovery of new drugs.

The agreement, announced Tuesday, is an extension of one signed in 2007, The New York Times’s Andrew Pollack reported. Sanofi, a big drug company based in France, previously agreed to provide $100 million a year to Regeneron, a biotechnology company based in Tarrytown, N.Y. The amount is being increased to $160 million a year, and the pact is being extended five additional years through 2017.

Dr. Leonard S. Schleifer, the chief executive of Regeneron, said the arrangement represented a way for a large pharmaceutical company and a biotechnology company to collaborate without suffocating the smaller company.

“They leave Regeneron and its culture to do its thing,” he said. “It’s everything a biotech company could dream of.”

Sanofi already owns 19 percent of Regeneron as a result of previous deals but will not increase its stake as part of the new transaction.

The drugs being developed are monoclonal antibodies, which are engineered versions of proteins naturally made by the immune system. Regeneron has developed genetically engineered mice that can produce human antibodies.

Under the deal, if Regeneron develops a drug it believes is ready for clinical trials, Sanofi can choose to co-develop it with Regeneron. So far, four antibodies have entered clinical trials in two years, and the companies aim to put four or five new ones into trials each year. That rate is higher than the norm for the industry.

Like most big pharmaceutical companies, Sanofi-Aventis is negotiating deals with smaller companies to bolster its pipeline of potential new drugs. In particular, it and other big companies are trying to move more into biotechnology, making drugs from living cells instead of from the chemicals they usually use.

In some cases, the biotech drugs can do things that chemical drugs cannot. The biotech drugs are also not subject to the same sudden generic competition that can devastate sales of chemical drugs. Sanofi recently started facing generic competition in some markets for its big-selling anti-clotting drug Plavix and its cancer drug Eloxatin.

<< Previous Story----Next Story >>