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AstraZeneca bets up to US$6 billion on new Daiichi cancer drug

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AstraZeneca will pay up to US$6 billion to Japan's Daiichi Sankyo under the drugmakers' second multi-billion dollar oncology collaboration to develop and market a niche type of targeted cancer treatment.

FILE PHOTO: Chief executive of AstraZeneca Pascal Soriot pictured after appearing at a parliamentary hearing in London, May 13, 2014. REUTERS/Neil Hall/File Photo

27 Jul 2020 08:15PM

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REUTERS: AstraZeneca will pay up to US$6 billion to Japan's Daiichi Sankyo under the drugmakers' second multi-billion dollar oncology collaboration to develop and market a new type of targeted cancer treatment.

The British drugmaker 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.

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AstraZeneca said on Monday it would make staggered upfront payments totalling US$1 billion to Daiichi 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 certain regulatory and sales achievements. The deal will not affect 2020 earnings forecast, AstraZeneca said.

"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.

Astra said the drug could bring US$1 billion or more in annual sales, taking to six the number of its cancer drug hopefuls with so-called blockbuster revenue potential.

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JP Morgan analysts said since AstraZeneca's upfront commitments were spread over three years it could still keep previous dividend commitments.

Analysts have previously said the group needed to be mindful of indebtedness and ability to pay dividends after a similar deal last year with financial commitments to Daiichi of as much as US$6.9 billion.

That deal also involved an ADC, targeting the HER2 protein seen in many breast cancers. It is now sold as Enhertu.

Astra's shares were 0.6per cent lower at 1118 GMT, while Daiichi stock closed 3per cent higher.

Preliminary data in May on DS-1062 from a Phase 1 lung cancer trial played a large role in convincing the British drugmaker of the compound, Jose Baselga Astra's head of oncology research said.

"From there we are going straight to Phase 3 studies that wRead More – Source

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