Companies to collaborate on global development of VEGF Trap

Bayer Healthcare and Regeneron Pharmaceuticals Inc. have agreed to collaborate on the development of the vascular endothelial growth factor (VEGF) Trap through a global plan that encompasses the neovascular form of age-related macular degeneration (AMD), diabetic eye diseases, and other eye diseases and disorders. The companies jointly will commercialize the VEGF Trap-Eye outside the United States and will share equally in profits from ex-U.S. sales. Within the United States, Regeneron has exclusive commercialization rights in all indications and will retain 100% of profits from any such sales.

Under the terms of the agreement, Bayer will make an upfront payment of $75 million to Regeneron; Bayer and Regeneron will share initial global development costs.

If a VEGF Trap-Eye product is granted marketing authorization in a major market country outside the United States, Regeneron, from its 50% share of VEGF Trap-Eye profits outside the United States, will reimburse Bayer for 50% of the development costs that Bayer incurred.

Regeneron can earn up to $110 million in total development and regulatory milestones related to the development of the VEGF Trap-Eye for wet AMD and diabetic macular edema (DME) (or other major eye indication) and marketing approvals in major market countries outside the United States. A total of $40 million of these milestone payments is due upon the initiation of phase III clinical trials in wet AMD and DME. Regeneron can earn up to $135 million in sales milestones when total annual sales of the VEGF Trap-Eye outside the United States achieve certain specified levels starting at $200 million.

Currently in phase I clinical trial for wet AMD and phase II clinical trial for DME, VEGF Trap-Eye is a fully human, soluble VEGF receptor fusion protein that binds all forms of VEGF-A and related placental growth factor. The VEGF Trap-Eye blocks the interaction of these growth factors with cell-surface receptors, thereby preventing the subsequent formation of the new blood vessels that play an important role in the development of eye diseases such as wet AMD.