Clinical-stage biopharmaceutical company First Wave BioPharma Inc (NASDAQ:FWBI) announced on Thursday a strategic agreement with French healthcare company Sanofi S.A. (Euronext Paris:SAN) (Nasdaq:SNY) to license Capeserod, a selective 5-HT4 receptor partial agonist.

First Wave will repurpose and develop Capeserod for gastrointestinal (GI) indications using AI-driven analyses, expanding its GI-focused pipeline.

Under the terms of the deal, First Wave gains an exclusive global licence for Capeserod from Sanofi and assumes responsibility for all future clinical development. The agreement includes an initial payment, backend milestone payments, and single-digit royalties on net sales. Sanofi has a right of first refusal to reacquire Capeserod after specific clinical development stages and to commercialise the product.

Sanofi's research and AI-driven analyses indicate that Capeserod's mechanism of action holds promise for addressing gastrointestinal disorders in multibillion-dollar markets with unmet clinical needs. Sanofi conducted seven Phase 1 and two Phase 2 trials involving over 600 patients to explore Capeserod's potential in neurological disorders, where it demonstrated safety and tolerability. First Wave plans to initiate clinical trials for Capeserod in GI diseases in 2024 and will request a meeting with the US Food and Drug Administration (FDA) to establish a development and regulatory pathway.