AstraZeneca PLC has forged its biggest deal in more than a decade, agreeing to pay up to US$6.9 billion to buy into a promising Japanese cancer treatment as part of its push to become a global oncology powerhouse.
AstraZeneca is to pay Japanese drugmaker Daiichi Sankyo Co Ltd US$1.35 billion upfront to jointly develop and commercialize the cancer therapy trastuzumab deruxtecan, with as much as US$5.6 billion in additional payments subject to sales milestones and other contingencies, the companies said late on Thursday.
They are also to equally split development and commercialization costs.
The deal fuels a race among big drug companies to develop effective — and lucrative — new cancer treatments.
With research breakthroughs like gene-editing and T-cell manipulation extending patients’ lives in unprecedented ways, the global market for cancer treatments has exploded to US$133 billion annually and become the fiercest battleground in pharmaceuticals.
AstraZeneca’s British rival GlaxoSmithKline PLC last month agreed to pay Germany’s Merck KGaA up to US$4.2 billion for access to a promising immune-oncology therapy.
AstraZeneca, headquartered in Cambridge, England, said that it would fund the transaction partly through a share sale of up to US$3.5 billion.
Daiichi’s treatment is one of the few in late-stage testing that could be a game-changer in the oncology landscape.
Projected to rake in US$7 billion annually at its peak, the treatment has been seen to double survival time for advanced breast cancer patients to 20 months, UBS Securities Japan Co analyst Atsushi Seki said.
“We believe that trastuzumab deruxtecan could become a transformative new medicine for the treatment of HER2 positive breast and gastric cancers,” AstraZeneca CEO Pascal Soriot said in a statement, adding that it has the potential to redefine breast cancer treatment.
The therapy combines a drug with a new delivery mechanism that applies chemotherapy selectively to cancer cells, minimizing systemic exposure to the patient.
Daiichi has already spent more than a decade developing the therapy before looking for a global partner, company executives said.
The transaction would not impact earnings this year, but will make a “significant contribution” by 2023, AstraZeneca said.
The partnership would add to shareholder value over the medium to long term, Daiichi said.
While the two companies are to split up the globe in booking sales — Daiichi is to take Japan, the US and parts of Europe, while AstraZeneca gets China, Australia, Canada and Russia — global profits are to be equally shared, they said.
The goal now is to get the treatment to patients.
Daiichi plans to submit its application to the US Food and Drug Administration by October and expects the regulator to reply in about 10 months, global head of oncology research and development Antoine Yver said.
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