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 London-listed AstraZeneca said on Monday it would pay $1 billion
upfront to Daiichi in staggered payments for an experimental drug
called DS-1062, which belongs to a promising class of therapies
called antibody drug conjugates (ADC).
Further payments would depend on regulatory and sales milestones
being achieved. The deal will not affect its 2020 earnings forecast,
the British company said.
AstraZeneca has been bolstering its portfolio of cancer therapies,
particularly ADCs, a major area of focus for the company as it also
ploughs on with its coronavirus vaccine candidate.
"We see significant potential in this antibody drug conjugate in
lung as well as in breast and other cancers that commonly express
TROP2," AstraZeneca Chief Executive Pascal Soriot said, referring to
a protein found on some cancer cell surfaces.
JP Morgan analysts said the drug could bring $1 billion or more in
annual sales, adding that since AstraZeneca's upfront commitments
are spread over three years, it could still keep previous dividend
cover commitments.
DS-1062, which targets the TROP2 protein, belongs to the ADC
category of drugs, which link powerful cell toxins to antibodies
that cling to cancer cells and spare healthy cells that are damaged
during conventional chemotherapy treatments.
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An anti-TROP2 ADC called Trodelvy developed by Immunomedics <IMMU.O> won U.S.
regulatory approval in April to treat an aggressive type of breast cancer, while
Chinese firms Kelun Group and Bio-Thera Solutions <688177.SS> are also working
on TROP2-based biotech drugs.
In a further boost to AstraZeneca's oncology unit, two of its on-market
therapies, one for lung cancer and another for blood cancer, won regulatory
endorsements for expanded use in Europe.
The company and Daiichi had signed a near $7 billion deal in 2019 for an ADC
targeting the HER2 protein. The drug is now sold as Enhertu.
The drugmakers have also been in talks over supply of the British company's
coronavirus vaccine in Japan.
AstraZeneca shares were roughly unchanged at 8,644 pence by 0917 GMT.
(Reporting by Pushkala Aripaka in Bengaluru; Additional reporting by Aakash
Jagadeesh Babu, and Ludwig Burger in Frankfurt; Editing by Saumyadeb Chakrabarty
and David Holmes)
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