Regeneron Grabs Bayer Deal

They'll seek to treat eye disease.
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Regeneron

(REGN) - Get Report

scored an eye disease partnership with

Bayer HealthCare

(BAY)

.

Bayer and Regeneron will collaborate on the development of the VEGF Trap-Eye through an integrated global plan that encompasses the neovascular form of age-related macular degeneration, diabetic eye diseases and other eye diseases and disorders.

The deal covers the global development, and commercialization outside the U.S., of the VEGF Trap for the treatment of eye disease by local administration. The VEGF Trap-Eye, currently in Phase I and Phase II clinical trials, is a protein that binds to or "traps" vascular endothelial growth factor (VEGF) and blocks its activity. VEGF is thought to play a critical role in certain eye diseases.

The companies will jointly commercialize the VEGF Trap-Eye outside the U.S and will share equally in profits from ex-U.S. sales. Within the U.S., Regeneron has exclusive commercialization rights in all indications and will retain 100% of all profits from any such sales.

Bayer will make an upfront payment of $75 million to Regeneron.

Regeneron can earn up to $110 million in total development and regulatory milestones and marketing approvals in a major market countries outside the U.S. A total of $40 million of these milestone payments are due upon the initiation of Phase 3 clinical trials in wet AMD and diabetic macular edema.

Regeneron can earn up to $135 million in sales milestones when total annual sales of the VEGF Trap-Eye outside the U.S. achieve certain specified levels starting at $200 million.

"The VEGF Trap is an excellent strategic fit for Bayer," Bayer said.

Regeneron shares were halted late Wednesday ahead of the news.