Evotec, a drug discovery alliance and development partnership company based in Germany, and Sanofi have announced a strategic diabetes collaboration to develop a beta cell replacement therapy based on functional human beta cells derived from human stem cells. In addition, Sanofi and Evotec will use human beta cells for high-throughput drug screening to identify beta-cell-active small molecules or biologics.

Both companies will make significant contributions to this collaboration in terms of expertise, platforms and resources. The collaboration will further enhance and complement Sanofi’s extensive diabetes portfolio and will extend Evotec’s metabolic disease and stem cell-based drug discovery programs.

The agreement between Evotec and Sanofi triggers an upfront payment of $3.29 million, potential preclinical, clinical, regulatory and commercial milestones, which could total more than $328.5 million as well as significant royalties and research payments.

Dr. Cord Dohrmann, chief scientific officer of Evotec, said, “The use of human stem cells in drug discovery and development is on the rise and will increasingly shift the landscape from symptomatic treatments to disease-modifying therapies also in diabetes.”