Evotec AG (EVT) rose the most in almost 2 1/2 years after the German drug-development company entered talks to buy French pharmaceutical maker Sanofi’s research operations in Toulouse.
Evotec jumped as much as 16 percent, the steepest intraday increase since July 10, 2012, and was trading up 13 percent at 3.69 euros as of 9:43 a.m. in Frankfurt. That pushed the stock to a 0.8 percent gain this year, including reinvested dividends, valuing Evotec at 485 million euros ($599 million).
The companies are in exclusive negotiations on a five-year alliance in which Evotec will receive a minimum of 250 million euros for early-stage research on cancer drugs, the Hamburg-based company said in a statement late yesterday.
Sanofi (SAN) has been in a tug-of-war with the French government since 2012 after deciding to shut research operations in the southern French city of Toulouse, where the blockbuster blood thinner Plavix was developed.
Chris Viehbacher, who decided to close the Toulouse location, was fired as chief executive officer in October. Chairman and interim CEO Serge Weinberg said last month that the research and development reorganization “could have been handled better.”
The deal, which Evotec and Paris-based Sanofi are targeting for completion by mid-2015, involves “a sizable upfront cash payment” and further payments based on development, regulatory and sales targets, plus royalties for both partners, the companies said.