Sanofi links with Evotec to tap stem cells for diabetes care

A logo is seen in front of the entrance at the headquarters French drugmaker Sanofi in Paris October 30, 2014. REUTERS/Christian Hartmann

(Reuters) - French drugmaker Sanofi is linking with Evotec to develop stem cell-based treatments for diabetes, under a deal that could earn the German biotech firm more than 300 million euros ($327 million).

Sanofi, a leading supplier of diabetes care, said on Friday the aim was develop beta cell-modulating diabetes therapies that could reduce or eliminate the need for insulin injections.

Beta cells play a key role in the development of diabetes and are destroyed by the patient's own immune system in type 1 diabetes.

The idea of producing functional beta cells derived from human stem cells reflects growing interest among pharmaceutical companies in using cells as medicines, in addition to proteins and chemicals.

Under the agreement, Evotec will receive different levels of payments depending on the success of the project in meeting development, regulatory and commercial targets.

(Reporting by Ben Hirschler; Editing by David Holmes)