AstraZeneca is betting big on with a potential $6.9 billion agreement with Daiichi Sankyo Company for trastuzumab, a promising medicine for cancer treatment.
The company will help pay for the deal for the Japanese company’s drug by tapping into the equity market for $3.5 billion. AstaZeneca employs about 1,500 in Delaware.
Trastuzumab deruxtecan is currently in development for the treatment of types of breast and gastric cancer.
In 2017, trastuzumab deruxtecan was granted Breakthrough Therapy Designation by the US Food and Drug Administration in treating a type of metastatic breast cancer.
The first regulatory submission is scheduled for the second half of 2019 for patients in the advanced breast cancer setting. Additional development for the treatment of breast, non-small cell lung cancer gastric and colorectal cancers is ongoing.
The companies will jointly develop and commercialize trastuzumab deruxtecan worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights. Daiichi Sankyo will be solely responsible for manufacturing and supply.
Pascal Soriot, CEO, said: “We believe that trastuzumab deruxtecan could become a transformative new medicine for the treatment of HER2-positive breast and gastric cancers. In addition, it has the potential to redefine breast cancer treatment as the first therapy for HER2-low expressing tumors. It also has the potential to treat other HER2-mutated or HER2-overexpressing cancers, including lung and colorectal cancers. We are proud to be working with Daiichi Sankyo, a long-term collaborator of AstraZeneca in other disease areas.”
George Nakayama, CEO of Daiichi Sankyo, said: “Trastuzumab deruxtecan is the flagship asset in our oncology pipeline created by our relentless pursuit of science and technology, the most important strengths of our company. Through the strategic collaboration with AstraZeneca, a company with a wealth of global experience and expertise in oncology, we will combine our respective skill sets to maximize the value of trastuzumab deruxtecan and accelerate the establishment of our global oncology business.”
Using Daiichi Sankyo ’s technology, trastuzumab deruxtecan has been designed to deliver chemotherapy selectively to cancer cells and reduce systemic exposure, in contrast to conventional chemotherapy delivery.
Under the terms of the agreement, AstraZeneca will pay Daiichi Sankyo an upfront payment of $1.35 billion half of which is due upon execution, with the remainder payable 12 months later.
Contingent payments of up to $5.55 billion include $3.8 billion for potential successful achievement of future regulatory and other milestones, as well as $1.75 billion for sales-related milestones.
AstraZeneca and Daiichi Sankyo will share equally development and commercialization costs as well as profits from trastuzumab deruxtecan worldwide, except for Japan.
The upfront payment and near-term milestones under the transaction will be funded from the proceeds of a new equity placement of approximately $3.5 billion.