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 The news sent Daiichi's shares soaring 16 percent, its daily limit,
to a record early on Friday. Daiichi's stock has climbed 45 percent
this year on optimism about the drug.
Under the deal, AstraZeneca will make an upfront payment of $1.35
billion to Daiichi. They will share development and
commercialization costs for the drug worldwide, with Daiichi
retaining exclusive rights in Japan.
"My impression is the upfront payment is particularly large. It's a
sign that AstraZeneca assumes the drug will become mainstream in the
next generation," said Takashi Akahane, a senior analyst at Tokai
Tokyo Research Center.
Daiichi is the latest Japanese drugmaker to strike a deal to gain
access to a bigger overseas player's R&D and sales clout.
The deal is also a big bet on Japanese research by AstraZeneca Chief
Executive Pascal Soriot, who is seeing results in his efforts to
replenish the British drugmaker's pipeline as its cancer drug sales
grow.
The two drugmakers have a long-standing relationship which includes
a 2015 agreement to jointly commercialize constipation drug Movantik
in the United States.
Trastuzumab deruxtecan "could become a transformative new medicine
for the treatment of HER2 positive breast and gastric cancers",
Soriot said in a statement.
The drug also has the potential to treat lung and colorectal
cancers. AstraZeneca plans to use some of the proceeds of a $3.5
billion share issue to fund the deal.
The treatment, called antibody-drug conjugate (ADC), is designed to
attack only cancer cells while sparing the healthy cells that are
usually damaged during typical chemotherapy treatments.
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Roche Holding AG's Kadcyla, also an ADC for HER2-positive breast
cancer, won U.S. Food and Drug Administration (FDA) approval in
2013.
Daiichi is expected to book sales for the cancer drug in the United
States, certain countries in Europe and some other markets where it
has affiliates.
AstraZeneca is expected to book sales in all other markets
worldwide, including China, Australia, Canada and Russia.
Daiichi has declared in its long-term vision to focus on oncology,
targeting 500 billion yen ($4.52 billion) in annual sales from the
business in fiscal 2025, from 20 billion in 2017.
The Japanese drugmaker is exploring the sale of its over-the-counter
drugs business and has hired JPMorgan to advise on the potential
deal, Reuters has reported.
In a separate statement on Friday, Daiichi said its President and
Chief Operating Officer, Sunao Manabe, would replace George Nakayama
as CEO, effective June 17. It did not give a reason for the change.
(Reporting by Sam Nussey and Takashi Umekawa in Tokyo; Additional
reporting by Bhargav Acharya in Bengaluru; Editing by Sandra Maler
and Muralikumar Anantharaman)
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