Sanofi-Aventis in $800 million deal with Avila; links up with Merck KGaA and with Oxford University for cancer research

In what was a busy few days for French drug major Sanofi-Aventis (Euronext: SAN) in its quest to develop new drugs in anticipation of forthcoming patent losses on some of its blockbusters, the firm has entered into a mega-million deal with USA-based closely-held Avila Therapeutics; has signed a worldwide R&D agreement with Germany’s Merck KGaA (MRK: DE) under which it will work with its Merck Serono division to investigate novel experimental combinations of agents that could block specific pathways in cancer cells; and a research accord with the UK’s Oxford University.

This morning, Avila announced an $800 million deal with Sanofi-Aventis to develop drug candidates for cancer targets using the US firm’s proprietary technology for covalent drugs. With this deal, Sanofi is making the first major investment in the pharma industry for a deal focused on discovering and developing targeted covalent drugs, which have the potential to be an innovative class of therapeutics with improved efficacy and drug properties.

The total deal value at over $800 million includes up to $40 million in upfront and research support payments plus development and regulatory milestones of up to $154 million per program (for five cancer programs to Sanofi; one program is retained by Avila). In addition, Avila will be eligible to receive tiered sales royalties on future product sales and will have the right to retain one of the six programs included in the alliance.