Japan's Daiichi Strikes Cancer Therapy Deal With AstraZeneca Worth Up To $6.9B

Shares of Japanese pharma company DAIICHI SANKYO/S ADR DSNKY were rallying Friday on the Tokyo Stock Exchange on a duo of catalysts: a collaboration agreement with British drugmaker AstraZeneca plc AZN and plans for an expedited Biologic License Application filing.

What Happened

Daiichi announced late Thursday that it has entered into a global development and collaboration agreement with AstraZeneca regarding its lead antibody drug conjugate [fam-] trastuzumab deruxtecan, or DS-8201.

The drug is an investigational candidate that is being developed for multiple HER2-expressing cancers, including breast and gastric cancer, and additional development in non-small cell lung and colorectal cancer.

The agreement provides for both companies to develop and commercialize DS-8201 as a monotherapy or a combination therapy worldwide. In Japan, Daiichi retains exclusive rights.

Manufacturing and supply is assigned to Daiichi in the deal. 

Daiichi will receive an upfront payment of $1.35 billion and contingent payments up to $5.55 billion, with $3.8 billion for achievement of future regulatory milestones and other contingencies and $1.75 billion for achieving sales-related milestones.

Daiichi stands to receive total payments of up to $6.9 billion.

The development and commercialization costs as well as profits from DS-8201 will be shared between both companies.

Separately, Daiichi said it plans to accelerate its BLA filing for DS-8201 in HER2-positive metastatic breast cancer previously treated with trastuzumab emtansine. The company plans a BLA submission in the first half of 2019 versus the original filing schedule of 2020.

Why It's Important

Breast cancer is the most common cause of cancer mortality in women worldwide, with an estimated 2.1 million new cases diagnosed in 2018, Daiichi said in the press release. 

And about one-in-five breast cancers are HER2-positive. HER2 is a protein found on the surface of some cancer cells associated with aggressive disease and poor prognosis.

What's Next

Daiichi said the initial BLA submission will be based on results from the pivotal Phase 2 DESTINY-Breast01 study, which it expects to present at an upcoming medical conference.

"Final determination of exact timing of the BLA submission of [fam-] trastuzumab deruxtecan will be based on the outcome of a pre-BLA meeting with the FDA," the company said.

AstraZeneca shares were slipping 6.19 percent to $40.32 at the time of publication Friday, while the OTC-listed Daiichi shares were soaring 23.57 percent to $49.62. 

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