TOKYO (Reuters) – AstraZeneca Plc and Daiichi Sankyo Co Ltd signed a deal to develop and sell Daiichi’s cancer drug trastuzumab deruxtecan that could see the British drugmaker pay as much as $6.9 billion to its Japanese partner.
The news sent Daiichi’s shares soaring 16 percent, its daily limit, to a record in morning Tokyo trading on Friday. Daiichi’s shares have climbed 45 percent this year as investor expectations for the drug rise.
Under the deal, AstraZeneca will make an upfront payment of $1.35 billion to Daiichi. The two companies will share development and commercialization costs for the drug worldwide, with Daiichi retaining exclusive rights in Japan.
Daiichi is the latest Japanese drugmaker to strike such a deal to gain access to a bigger overseas player’s R&D and sales clout.
The deal is also a big bet on Japanese research by AstraZeneca Chief Executive Pascal Soriot, who is seeing results in his efforts to replenish the drugmaker’s pipeline as its cancer drug sales grow.
The two drugmakers have a long-standing relationship which includes a 2015 agreement to jointly commercialize constipation drug Movantik in the United States.
Trastuzumab deruxtecan “could become a transformative new medicine for the treatment of HER2 positive breast and gastric cancers,” Soriot said in a statement.
The drug also has the potential to treat lung and colorectal cancers. AstraZeneca plans to use some of the proceeds of a $3.5 billion share issue to fund the deal.
Reporting by Sam Nussey in Tokyo; Additional reporting by Bhargav Acharya in Bengaluru; Editing by Sandra Maler and Muralikumar Anantharaman