With Kevzara in COVID-19 testing, Sanofi and Regeneron won't divvy up their rights

As part of CEO Paul Hudson's grand vision at Sanofi, the French drugmaker announced late last year a restructuring of its long-standing antibody partnership with Regeneron.

But one of those partnered drugs, IL-6 inhibitor Kevzara, is now in the spotlight as a possible coronavirus treatment––and at least for now, that partnership will stand.

Sanofi and Regeneron are moving ahead with restructuring their agreement on PCSK9 med Praluent but chose not to rejig their Kevzara arrangement while it's in COVID-19 testing, the drugmakers said Monday.

They initially decided to divide up rights after the two drugs' underperformance stifled profits for both drugmakers.

But with Kevzara cast in a new light, Sanofi and Regeneron opted only to rework their deal for Praluent, with Regeneron taking over U.S. commercialization rights and receiving a royalty from Sanofi on sales abroad, effective April 1.

That streamlined agreement should help both drugmakers' bottom lines, SVB Leerink analyst Geoffrey Porges wrote in a note to investors Tuesday.

"Praluent was a drag on profitability for both companies last year, and simplifying its commercialization and reducing its losses should benefit the results for both companies," Porges wrote.

RELATED: Sanofi, Regeneron hustle Kevzara into 2nd pivotal coronavirus study

Sanofi and Regeneron's decision to hold pat on Kevzara comes as the drug runs through a global clinical trial to determine its ability to treat COVID-19.

Last month, the partners announced a two-part phase 2/3 clinical program for Kevzara, including separate trials stateside and abroad. The U.S. arm of the study will evaluate a combination of Kevzara and supportive care in about 400 patients across 16 states, Regeneron said.

The trial abroad, announced two weeks later, will enlist severely or critically ill patients who've been hospitalized in Italy, Spain, Germany, France, Canada and Russia, and the drugmakers are working to "secure initiation at additional sites," Regeneron said in a release at the time. The trial will eventually enroll around 300 patients and study intravenous Kevzara as an add-on to supportive care, Regeneron said.

Kevzara is one of a group of IL-6 inhibitors being evaluated to treat COVID-19 alongside Roche's Actemra and EUSA Pharma's Sylvant.

RELATED: Sanofi, Regeneron uncouple on long-standing drug partnership, splitting up Praluent, Kevzara

Despite the change of plans on Kevzara, reworking their Praluent deal should pay dividends for Sanofi and Regeneron, with the latter predicting the product will break even at worst post-restructuring, Porges wrote.

In 2019, Praluent secured $289 million in sales as pricing pressure and limited uptake in the PCSK9 class kept revenues down.

Perhaps more importantly for both companies, their 50-50 split on Dupixent, which hit $633 million in global sales in 2019, won't be affected. Sanofi said it believes Dupixent can generate more than €10 billion at peak, potentially providing huge profits for both drugmakers even with Praluent underperforming and Kevzara's future uncertain.