AstraZeneca to pay Daiichi $6bn for new cancer drug

Bloomberg

AstraZeneca Plc agreed to pay as much as $6 billion to buy into a promising medicine for lung and breast cancer in the second potential blockbuster oncology deal in two years with Japan’s Daiichi Sankyo Co.
The UK drugmaker will pay Daiichi $1 billion upfront to jointly develop and bring to market a cancer therapy in early clinical tests called DS-1062, with as much as $5 billion in additional payments subject to regulatory and sales milestones, the companies said on Monday.
AstraZeneca is forging ahead to become a global oncology powerhouse, even as it works on a vaccine for the coronavirus pandemic. Last year, the company committed to pay Daiichi as much as $6.9 billion for another cancer medicine, which marked its biggest deal in more than a decade.
The latest treatment, an antibody drug conjugate that targets tumors that express a protein known as TROP2, could “redefine treatment standards in lung, breast and multiple other cancers,” according to
AstraZeneca.
AstraZeneca shares were little changed in London, trading at 8,659 pence. Daiichi shares rose 3% to 8,666 yen in Tokyo.
Daiichi will manufacture and supply the drug, and keep exclusive rights to the medicine in Japan.
AstraZeneca didn’t say how it will fund the transaction, but the upfront payment will be made in three stages: $350 million this month when the deal closes, $325 million after 12 months and again a year later.
Data from early trials points to strong activity in lung cancer, but also high toxicity with two deaths, said Sam Fazeli, an analyst at Bloomberg Intelligence.