Evotec, a drug discovery alliance and development partnership company based in Germany, has signed an agreement for a major multi-component strategic alliance over the next five years with Sanofi. The transaction is expected to close March 31.

The collaboration will result in a minimum guaranteed commitment from Sanofi to Evotec of $270 million, including more than $43 million upfront in cash. The five-year agreement includes initiatives with both of Evotec's two business segments (EVT Execute and EVT Innovate).

Following its strategic growth plans, Evotec will expand its capabilities in drug discovery by integrating a state-of-the-art facility and more than 200 employees in Toulouse, France. Evotec will integrate the Toulouse capacities into its global drug discovery infrastructure and offering. The expanded capabilities will serve to support collaborative research in drug discovery from screening to identification of preclinical candidates with Evotec's Pharma, biotech, venture capital and academic partners.

Evotec will provide a broad range of long-term drug discovery services to Sanofi. This agreement is centered on the core small-molecule discovery platforms in Toulouse. In addition, Evotec will assume management of Sanofi's global screening compound library.

In an open innovation initiative, the companies will combine their libraries and offer them for screening to Evotec's business partners. This creates one of the largest sources of starting points for drug discovery, with approximately 1.7 million compounds available to screen.

The definitive agreement defines the conditions under which Evotec and Sanofi intend to jointly progress a portfolio of primarily oncology related projects, including five advanced, preclinical projects and further discovery-stage assets, to IND status or other value inflection points before partnering them.

Sanofi and Evotec aim at further energizing and accelerating the translation of excellent science from academic institutions to Pharma. In a joint effort, Evotec will scout and incubate projects generated in France into the pipeline of Evotec's Cure X/Target X strategy.