AstraZeneca and Daiichi Sankyo Ink $6 Billion Cancer Pact

Business Deal_Compressed

AstraZeneca inked a global development and commercialization deal with Daiichi Sankyo Company for DS-1062, a trophoblast cell-surface antigen 2 (TROP2)-directed antibody drug conjugate (ADC) for multiple cancer types. The drug is being developed for multiple tumors that express TROP2, including the majority of non-small cell lung cancers and breast cancers.

“We see significant potential in this antibody drug conjugate in lung as well as in breast and other cancers that commonly express TROP2,” said Pascal Soriot, AstraZeneca’s chief executive officer. “We are delighted to enter this new collaboration with Daiichi Sankyo and to build on the successful launch of Enhertu to further expand our pipeline and leadership in oncology. We now have six potential blockbusters in oncology with more to come in our early and late pipelines.”

Under the terms of the deal, AstraZeneca is paying Daiichi Sankyo $1 billion up front in staged payments: $350 due on completion, with $325 million after 12 months and $325 million after 24 months from the effective date of the agreement. AstraZeneca will pay another $1 billion in regulatory milestones and up to $4 billion for sales-related milestones.

The two companies will jointly develop and commercialize DS-1062 globally, except in Japan where Daiichi Sankyo will hold exclusive rights. They will split development and commercialization expenses equally as well as global profits, except in Japan, where Daiichi Sankyo will handle costs and pay AstraZeneca mid-single-digit royalties. Daiichi Sankyo will handle sales in the U.S., some European countries and other countries where it has affiliates. Those profits will be shared with AstraZeneca as Collaboration Revenue. Daiichi Sankyo will manufacture and supply DS-1062.

The two companies already have a global collaboration deal they entered in March 2019 to develop and commercialize Enhertu (HER2-directed ADC) worldwide, excepting Japan, where Daiichi Sankyo holds exclusive rights.

All told, the deal could hit $6 billion. Antibody drug conjugates (ADCs) combine monoclonal antibodies specific to cancer antigens that are linked to anti-cancer drugs. This way the cancer drug is more specifically targeted to the cancer cells.

AstraZeneca believes the drug could rake in $1 billion or more annually. According to Reuters, JP Morgan analysts indicated that since AstraZeneca’s upfront payments were staged over three years, it could keep previous dividend commitments. They also said the companies needed to be cautious of too much debt and its ability to pay dividends after the previous Daiichi deal.

Jose Baselga, AstraZeneca’s head of oncology research, indicated that preliminary data on DS-1062 in a Phase I lung cancer trial in May was the big mover in today’s deal. “From there we are going straight to Phase III studies that will launch this year,” he said.

The next indication it will be studied for is breast cancer.

Immunomedics received approval from the U.S. Food and Drug Administration (FDA) in April for its anti-TROP2 ADC, Trodelvy (sacituzumab govitecan-hziy) to treat adults with metastatic triple-negative breast cancer (TNBC) who have received at least two previous therapies for metastatic disease. Chinese biopharma companies Kelun Group and Bio-Thera Solutions are also developing TROP2-based drugs.

AstraZeneca also announced today that its Imfinzi (durvalumab) had been recommended for marketing authorization in Europe for first-line treatment of adults with extensive-stage small cell lung cancer (ES-SCLC) in combination with a chemotherapies etoposide plus either carboplatin or cisplatin; also, its Calquence (acalabrutinib) was recommended for marketing authorization in Europe for adults with chronic lymphocytic leukemia (CLL).

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