After an approval in Europe, AstraZeneca and Sanofi’s respiratory syncytial virus prevention antibody nirsevimab is on track for an FDA decision this year. Now, a third company wants to simplify its role with the pharma giants.
Sobi has signed a new royalty agreement with Sanofi around nirsevimab sales in the U.S. The deal essentially sets a direct payment line between the two companies, while cutting AstraZeneca from its relationship with Sobi.
Sobi got a piece of nirsevimab from AstraZeneca through a 2018 transaction. At that time, Sobi paid AZ $1.5 billion upfront to acquire RSV antibody Synagis and rights to 50% of U.S. profits from its follow-on drug, nirsevimab. Through an earlier deal in 2017, AZ and Sanofi share nirsevimab costs and profits 50-50.
Under those older deals, Sobi owned AZ’s full share of U.S. profits for nirsevimab. But the original Sobi-AZ deal was more complicated than that, including obligations for Sobi to make additional development and commercial milestone payments to AZ.
The FDA’s acceptance of AZ and Sanofi’s filing for nirsevimab in January triggered a $175 million milestone payment from Sobi to AZ. An FDA approval would trigger another $90 million payment per the original Sobi-AZ pact.
As part of the new deal, Sobi will pay Sanofi $66 million to reimburse the French pharma company for prior R&D costs around nirsevimab in the U.S. In the future, Sobi will receive royalties starting at 25% of nirsevimab’s U.S. sales. The rate will increase to a range of 30% to 35% from 2025 to 2028 and will stay at those levels thereafter, Sobi said.
In addition, Sobi has offered AZ $15 million to sever their ties, with no future milestone or royalty payments between the two firms.
The new pact will provide Sobi the benefit of simplification and greater flexibility, the Swedish company said in a statement. It allows Sobi to record sales-based royalties as revenues without cost-sharing responsibilities or milestone payments.
Sobi paid the $1.5 billion to AstraZeneca partly through granting the British drugmaker about 8% of its total shares. That arrangement came back to bite Sobi in 2021, when AZ reportedly used its vote to block a $7.6 billion proposal to take Sobi private. At that time, people familiar with the matter told Bloomberg that AZ was worried that Sobi’s new owners could sell nirsevimab to a rival.
As of the end of 2022, AZ was Sobi’s second-largest shareholder, owning 9.9% of the voting stake in Sobi, according to Sobi’s annual report.
Buying Synagis significantly boosted Sobi’s U.S. commercial presence and revenues. At the time, the company said the move could give it additional firepower to further expand in the U.S. and look for strategic acquisitions.
Synagis represents Sobi’s second-largest asset, next to recombinant factor VIII therapy Elocta. Synagis’ sales grew by 32% in 2022 to 3.5 billion Swedish krones ($330 million).
Nirsevimab, approved in November as Beyfortus to protect infants in Europe, could be a bigger product than Synagis. The next-generation antibody has shown greater potency at inhibiting RSV than Synagis in cell cultures and animals. While Synagis is only allowed in infants at high risk of severe RSV disease, including those who were born preterm with certain health conditions, AZ and Sanofi are positioning nirsevimab for a broader patient population.
In a pooled analysis of two clinical trials, the newer antibody drug showed a 79.5% efficacy against placebo at preventing lower respiratory tract disease in healthy preterm and term infants who were ineligible to receive commercial Synagis.