3/21/2013 8:19:24 AM
The new CEO of AstraZeneca, Pascal Soriot, has just written a huge check, worth $240 million in upfront cash. It’s going to a little biotech startup in Cambridge, MA, that started a couple years ago with a far-out idea for making drugs in a fast, cheap, and completely unorthodox way. London-based AstraZeneca (NYSE: AZN) is announcing today it has struck an exclusive partnership with Moderna Therapeutics (pronounced mode-UR-nuh) to gain access to the startup’s technology, which uses injectable messenger RNA molecules to trigger production of protein drugs in the body. The total value of the deal isn’t being disclosed, but it’s huge for a little company that hasn’t yet advanced to the ultimate proving ground—human clinical trials. For starters, Moderna is getting $240 million in upfront cash. It’s eligible to get $180 million more for hitting three technical milestones, which aren’t being disclosed, says CEO Stephane Bancel. Moderna is also eligible to get undisclosed milestone payments, based on development and commercial progress, for each of the 40 different drug candidates that AstraZeneca has gained the right to develop for cardiovascular, metabolic, and kidney conditions, as well as certain forms of cancer. Plus, Moderna stands to collect royalties that range from a high single-digit percentage of sales to a low double-digit percentage. Moderna didn’t have to give away any equity ownership of the company to AstraZeneca to get those terms. And Moderna retains the right to do perhaps one other partnership, and to develop its own drugs for rare diseases and cancer. While there have been bigger upfront payments to biotech companies—Roche’s $331 million upfront payment to Alnylam Pharmaceuticals (NASDAQ: ALNY) in 2007 was one—there aren’t many deals that have been this big for a company with a technology that hasn’t yet entered clinical trials.
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