Regeneron (REGN) and Genentech Strike Deal on Worldwide EYLEA Sales

May 20, 2013 5:25 PM EDT
Regeneron Pharmaceuticals (Nasdaq: REGN) has entered into agreements with Genentech, Inc. relating to the worldwide sales of EYLEA® (aflibercept) Injection and ZALTRAP® (ziv-aflibercept) Injection for Intravenous Infusion (also known as aflibercept outside of the United States). These agreements resolve all pending litigation with Genentech over EYLEA and ZALTRAP worldwide.

EYLEA Agreement

Regeneron and Genentech entered into an Amended and Restated Non-Exclusive License and Settlement Agreement, effective as of May 17, 2013 (the “Amended Agreement”), which amended their Non-Exclusive License and Partial Settlement Agreement, dated December 31, 2011 (the “Original Agreement”), relating to the sales of EYLEA in the United States to now include all sales of EYLEA worldwide. Under the Amended Agreement, Regeneron received a worldwide non-exclusive license to certain patents relating to VEGF receptor proteins, known as the Davis Smyth patents, and certain other patents, for the prevention or treatment of eye diseases and eye disorders in a human through administration of EYLEA to the eye (the “ocular field”). The Davis-Smyth patents are the subject of patent litigation between Regeneron and Genentech relating to EYLEA, now pending in the United States District Court, Southern District of New York, which will be dismissed pursuant to the Amended Agreement. Regeneron will make payments to Genentech based on sales of EYLEA in the United States and EYLEA manufactured in the United States and sold outside the United States through May 7, 2016 using the same milestone and royalty rates as in the Original Agreement. EYLEA is sold outside the United States by affiliates of Bayer HealthCare LLC under a license and collaboration agreement (the “Bayer Agreement”).

Under the Original Agreement, a $60 million milestone payment was made when cumulative U.S. sales reached $400 million, and Regeneron is obligated to pay royalties of 4.75% on cumulative relevant sales of EYLEA between $400 million and $3 billion and 5.5% on any cumulative relevant sales of EYLEA over $3 billion. All payments to Genentech under the Original Agreement and the Amended Agreement are made by Regeneron. Bayer HealthCare will share in all such payments based on the proportion of ex-U.S. EYLEA sales to worldwide EYLEA sales and determined consistent with the Bayer Agreement.

ZALTRAP Agreement
Regeneron, Genentech, Sanofi U.S. Services, Inc. and Sanofi-Aventis U.S. LLC (the latter two entities, collectively, “Sanofi”) entered into a Non-Exclusive License and Settlement Agreement, effective as of May 17, 2013 (the “Zaltrap Agreement”), under which Regeneron and Sanofi (Regeneron’s global marketing partner for ZALTRAP) received a worldwide non-exclusive license to the Davis-Smyth patents, and certain other patents, in all indications for human use other than the ocular field. The Davis-Smyth patents are the subject of patent litigation between Sanofi, Regeneron and Genentech relating to ZALTRAP now pending in the United States District Court, Southern District of New York, which will be dismissed pursuant to the ZALTRAP Agreement.


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