Germany-based Evotec is negotiating with French drugmaker Sanofi for a multi-component strategic collaboration over the next five years.
The alliance will include three major strategic initiatives, focusing on improving innovation effectiveness in drug discovery and pre-clinical development space.
The three major strategic initiatives include an agreement on oncology and potential Cure X / Target X initiatives.
Evotec CEO Werner Lanthaler said: "This collaboration is a major milestone in the drug discovery space and accelerates Evotec’s strategy to become the leading drug discovery partner to the pharma and biotech industry as well as academia."
According to Evotec, the deal is expected to provide a commitment of €250m from Sanofi to the company over the next five years, including a sizeable upfront cash payment that will be defined in the agreement.
The collaboration will include a co-development agreement with associated upfront, development, regulatory and sales milestones, as well as royalties benefiting both parties.
Sanofi global R&D president Elias Zerhouni said: "We believe Evotec will be an ideal partner, a company that fits our quality expectations and our strategic vision.
"Our collaboration will secure the future for our employees in Toulouse and importantly accelerate our pipeline productivity."
Evotec will license a portfolio of projects from Sanofi, which includes five well-advanced pre-clinical projects in oncology that will be progressed to investigational new drug (IND) jointly by the companies before potential partnering.
The second strategic alliance will include the acquisition of Sanofi’s drug discovery operations in Toulouse to build a European centre of excellence for compound management and drug discovery services.
Both companies intend to combine their libraries to make them available for screening to Evotec’s partners, as part of the third initiative.
Subject to finalisation of definitive agreements and completion of the appropriate social process, the multi-component transaction is expected to be signed in the first half of 2015.