AstraZeneca PLC Divests Yet Another Drug, This Time to Sanofi for $300 Million

July 27, 2015
By Mark Terry, BioSpace.com Breaking News Staff

London-based AstraZeneca PLC announced today that it had signed a definitive agreement with Genzyme, a Sanofi company, to sell cancer drug Caprelsa (vandetanib).

Caprelsa is used to treat aggressive and symptomatic medullar thyroid carcinoma. It was granted Orphan Drug Designation by the U.S. Food and Drug Administration (FDA) in 2005 and is prescribed in 28 countries. In 2014 AstraZeneca indicates the drug brought in $48 million.

Genzyme is paying an upfront payment of $165 million for global rights to sell and develop the drug, with possible development and sales milestones that could add another $135 million for a total of $300 million.

“Caprelsa is a rare disease therapy,” said Luke Miels, vice president, Global Product & Portfolio Strategy and Corporate Affairs for AstraZeneca in a statement, “and the divestment to Genzyme, an expert leader in endocrinology, demonstrates our commitment to ensure patients continue to have access to this medicine while we sharpen our focus on key disease areas.”

The drug is currently in Phase III trials for differentiated thyroid carcinoma. Results from that study are expected in the second half of 2015.

This is not AstraZeneca’s first “externalization” deal for the year. In July the company announced it had divested its gastrointestinal drug, Entocort, for $215 million. The rights for sales outside the U.S. sold to Tillotts Pharma, part of the Zeria Group. Entocort (budesonide) is prescribed for patients with mild to moderate Crohn’s disease and ulcerative colitis. In 2014 the drug brought in sales of $53 million outside the U.S. and is sold in more than 40 countries.

The company has indicated that these sell-offs will allow it to refocus on selected therapeutic areas, specifically cancer, respiratory diseases and diabetes. Other deals have included AstraZeneca and Eli Lilly and Company’s joint development agreement for AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor in development as a possible treatment for Alzheimer’s disease. In that deal Lilly is paying up to $500 million in development and regulatory milestones with the first milestone payment of $50 million paid in the first half of this year.

In May AstraZeneca announced a co-commercialization deal with Daiichi Sankyo, Inc. for MOVANTIK (naloxegol) in the U.S. MOVANTIK is a treatment for opioid-induced constipation in adults with chronic non-cancer pain. Daiichi Sankyo paid $200 million upfront with subsequent sales payments up to $625 million.

One of the other reasons AstraZeneca is developing so many externalization deals is because the company’s blockbuster drug Nexium, for acid reflux, is getting pounded as generics flood the market. Along with the company’s Crestor, for high cholesterol, the two drugs accounted for about 35 percent of the company’s revenue in 2014. However, they are both down by about a third from their peak, and another two-thirds are expected to be lost to generic competition by 2017.

In May 2014, Pfizer bid $119 billion for AstraZeneca, but that deal fell apart. The company showed overall revenue of $26.095 billion in 2014, up from $25.711 billion in 2013, but down from 2012’s $27.973 billion. Although revenue increased by 3 percent, an actual basis revenue increased by 1 percent as a result of exchange rate movements. Core operating profit dropped by 13 percent.

Pascal Soriot, AstraZeneca’s chief executive officer, indicates that selling off non-core drugs will give the company cash to invest in promising pipeline drugs. Some analysts have expressed concern about the company’s reliance on these sorts of deals.