P&G/Regeneron In $135m Deal

Procter & Gamble has signed an agreement with Regeneron worth $135million to the biotechnology firm, as part of a major new effort to develop drugs for arthritis, cancer and cardiovascular diseases. The cash injection is a welcome boost for Regeneron, which has suffered since its drug for amyotrophic lateral sclerosis BDNF failed to show efficacy earlier this year (Marketletter January 20).

The deal consists of $75 million in funding over the next five years, and $43 million in equity, bringing P&G's 3% stake up to 16.7%. A further $17 million equity spend is also planned over the five-year period, although P&G's ownership cannot go above 20%. There is also an option for extending the link-up after five years, with P&G providing additional funding of at least $75 million. In return, P&G gets rights to all drugs arising from Regeneron's research programs, with the exception of certain drugs for central nervous system disorders and programs covered by existing collaborations.