AstraZeneca to raise $3.5bn for global partnership

Japan's Daiichi Strikes Cancer Therapy Deal With Astra Zeneca Worth Up To $6.9B

Japan's Daiichi Strikes Cancer Therapy Deal With Astra Zeneca Worth Up To $6.9B

Daiichi Sankyo Company, Limited has entered into a global development and commercialization agreement with AstraZeneca for Daiichi Sankyo's lead antibody drug conjugate (ADC), [fam-] trastuzumab deruxtecan (DS-8201), now in pivotal development for multiple HER2 expressing cancers including breast and gastric cancer, and additional development in non-small cell lung and colorectal cancer.

Separately, AstraZeneca said it would pay for the upfront payment and near-term milestones to Daiichi Sankyo from the proceeds of a new $3.5 billion equity placement, more than half of which AstraZeneca plans to use toward the transaction and ongoing collaboration.

Chief executive Pascal Soriot, who has made investment in cancer treatments a focus of his tenure, said: "We believe that trastuzumab deruxtecan could become a transformative new medicine for the treatment of HER2-positive breast and gastric cancers".

The drug, called Trastuzumab Deruxtecan, allows chemotherapy products to target specific cancer tumours.

'The transaction is expected to be neutral to core earnings in 2019, with growing Core EPS accretion from 2020 and making a significant contribution in 2023, ' AstraZeneca said.

In contrast to traditional chemotherapy treatments, trastuzumab deruxtecan has been created to target and delivery chemotherapy inside cancer cells, helping to reduce side-effets from the treatment. Daiichi Sankyo has said that means its drug can carry a greater cytotoxic payload.

The partnership would add to shareholder value over the medium to long term, Daiichi said.

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Goldman Sachs International and Morgan Stanley & Co are acting as joint global coordinators and joint bookrunners on behalf of AstraZeneca on the placing. For the Japanese firm, the tie-up is its biggest licensing deal ever, said Stuart Mackey, Daiichi's head of global business development.

The companies will jointly develop and commercialize trastuzumab deruxtecan worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights.

The global development and commercialisation agreement covers the potential cancer treatment trastuzumab deruxtecan.

The treatment received a breakthrough therapy designation from the U.S. Food and Drug Administration in 2017, a status which is given in instances where there is no current medicine for the condition the drug is aimed at.

An approval could occur soon: the companies intend to make the first regulatory filing of the drug in the second half of the year, for advanced or refractory breast cancer. In the US, the largest pharmaceutical market, Daiichi Sankyo will record sales and then split profits.

This is not the first time the two companies have been linked.

Despite a couple of knockbacks in trials seeking to expand its uses into other indications such as gastric cancer, Kadcyla has become an important part of Roche's anti-HER2 portfolio with sales approaching $1bn a year ago. Daiichi denied the reports.

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