Evotec AG has reached its second beta Cell therapy milestone under its strategic alliance with Sanofi in the field of diabetes, triggering a €3 million payment to Evotec.

Evotec met pre-agreed critical success criteria for a potential manufacturing process for generation of human induced pluripotent stem cell (iPSC)-derived beta cells, including the demonstration of upscaling potential and suitability of the cell product for encapsulated beta cell function in diabetes models. The goal of the collaboration is to develop a beta cell replacement therapy based on beta cells derived from human iPS cells.

Cord Dohrmann, chief scientific officer of Evotec, said, "Diabetes is one of the major threats to global healthcare with over 420 million people across the globe affected by either type 1 and type 2 diabetes. We are very pleased with the progress we are making towards a potential game changing beta Cell Therapy approach and remain committed to discover additional treatment options together with our colleagues at Sanofi."

In August 2015, Evotec and Sanofi entered into a strategic alliance to develop a beta cell replacement therapy based on functional human beta cells derived from human stem cells for diabetes. Evotec and Sanofi will also use human beta cells for high-throughput drug screening to identify beta cell active small molecules or biologics. Evotec is eligible to receive potential preclinical, clinical, regulatory and commercial milestones, which could more than €300 million as well as royalties and research payments. To date, Evotec has received €9 million in upfront and milestone payments from Sanofi, as well as, substantial research funding.