Evotec AG announced having signed a transaction agreement with Sanofi to integrate Sanofi's infectious disease unit into its organisation.

Pursuant to this agreement, Evotec will also licence-in the majority of Sanofi's infectious disease research portfolio and initiatives. This successfully seals the exclusive negotiations between the two companies and completion of the required legal social process, initiated on 08 March 2018. The transaction will be closed in the coming weeks and remains subject to customary approvals and conditions, including the approval by regulatory authorities in France.

Evotec will accelerate the infectious disease research pipeline development and initiate new open innovation R&D initiatives in anti-infectives. Going forward, Evotec will engage in open collaborations with other pharmaceutical and biotechnology companies, foundations, academia and government agencies to further accelerate research in infectious diseases. The initial focus areas will be on antimicrobial resistance ("AMR") and superbug infections, Tuberculosis and Malaria, as well as the creation of novel antiviral therapies with new mechanisms of action.

Dr Werner Lanthaler, Chief Executive Officer of Evotec, said: "With the signing of this transaction, Evotec will have created the highest qualified translational footprint in infectious disease research globally with approx. 180 scientists. We warmly welcome the Sanofi employees to Evotec and look forward to working with them on this very important mission. Together we are well-positioned to become the global drug discovery and development partner of choice in this important therapeutic category. We invite more companies, academic institutions, governments and foundations from around the world to help us advance new novel anti-infectives toward the market."

As part of the transaction, Sanofi will pay EUR 60 m upfront and will provide Evotec with additional, significant long-term funding to ensure the progression of the highly innovative anti-infectives portfolio. Sanofi will retain certain option rights on the development, manufacturing and commercialisation of the anti-infective products resulting from the licensed assets. As part of the transaction, Evotec will add and integrate 100 highly qualified employees into its global drug discovery and development operations. The positions from Sanofi will be transferred with certain, specific long-term commitments of employment. Evotec will continue to operate in Lyon, taking advantage of the location's scientific and medical excellence in infectious diseases.

The transaction will result in increased operating income as well as increased R&D expenditure and will be slightly accretive to Evotec's EBITDA for the next five years.