Sanofi-Aventis (SNY) recently extended and expanded its antibody collaboration with biopharmaceutical company, Regeneron Pharmaceuticals, Inc. (REGN). The companies had initially entered into a collaboration agreement in 2007, which was scheduled to expire in 2012.

Under the extended agreement, Sanofi will increase its annual funding commitment by $60 million to $160 million from 2010. Moreover, the agreement will now extend through 2017 with Sanofi having the option to extend the program for an additional three years.

The companies are looking to move four-five antibodies into clinical development every year. In addition to using its VelocImmune technology, Regeneron will also utilize its next generation technologies related to antibody generation for the development of antibodies under the collaboration.

Under the existing collaboration, four VelocImmune human antibodies are in clinical development, and the companies have filed for permission to move a fifth antibody into clinical development.

The extension of the agreement is in-line with Sanofi’s goal of focusing on new approaches to strengthen its R&D portfolio. Sanofi has been looking at several options to grow revenues given the high exposure of many of its leading franchises to generic risk. The generic risk to Lovenox is the most concerning and, if it were to materialize, would cause significant problems for Sanofi. Meanwhile, Plavix continues to face generic erosion in some parts of Europe.

Sanofi is looking to grow revenues through partnering deals and acquisitions in order to help plug revenue holes left by patent expirations. The recently concluded third quarter saw the company entering into licensing and collaboration agreements with Merrimack and Wellstat Therapeutics. Sanofi also signed an agreement to acquire French pharmaceutical company, Fovea.

Sanofi has also been focusing on the highest growth and most promising development programs. We expect Sanofi to continue look to contain operating costs in order to grow earnings in the face of weakening sales of some of its biggest products.

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