Celgene Slaps Down $450 Million Upfront for AstraZeneca PLC's Prized Immunotherapy Blood Cancer Drug
April 24, 2015
By Alex Keown, BioSpace.com Breaking News Staff
LONDON -- AstraZeneca entered into a $450 million agreement with Celgene that will allow the U.S.-based drug firm to develop MEDI4736, AstraZeneca’s immunotherapy treatment for blood cancer.
News of the deal spurred a sharp increase in Celgene’s stock this morning. The stock opened at $115.93 per share and has a morning high of $120.46 per share.
AstraZeneca’s top officer said the deal is a strategic move to accelerate the drug’s path to market, Reuters reported this morning. Pascal Soirot, AstraZeneca’s chief executive officer, anticipates blood cancer treatments will eventually represent about 40 percent of the cancer market. Soirot said the deal is transformational and although the company would sacrifice half of the profits on blood cancer treatments, AstraZeneca will receive 50 percent of a better proposition.
“Our strategic collaboration with Celgene, a leader in hematology, will maximize the potential of our immuno-oncology assets in the very important hematology indications.” Soirot said in a statement.
While Soirot called the deal strategic, Reuters reported some analysts are wary of the deal, believing AstraZeneca has given away too much as part of a short-term answer to fill revenue gaps.
The company has done extensive work in solid tumors, but not blood cancers.
Under the deal, Celgene will be responsible for selling MEDI4736 in blood cancers and will pay AstraZeneca an initial royalty of 70 percent, which will decrease to approximately half of sales over a period of four years.
Celgene will also be responsible for global commercialization of approved treatments. AstraZeneca will continue to manufacture and book all sales of MEDI4736 and will pay a royalty to Celgene on worldwide sales in hematological indications.
Jacqualyn A. Fouse, Celgene’s head of oncology, said the collaboration with AstraZeneca “advances Celgene’s already deep, diverse scientific platform to include checkpoint inhibitors, an area of significant promise in hematology.”
The promising blood cancer drug could be used to target blood cancers including non-Hodgkin’s lymphoma, myelodysplastic syndromes and multiple myeloma.
AstraZeneca is separately developing this drug in lung and head and neck cancers. The FDA awarded MEDI4736 Fast-Track designation for lung cancer treatment. The company is currently running 72 clinical trials, including 31 in immuno-oncology, which the company sees as a key to future growth.
Immuno-oncology is an expanding field with large and small companies, such as Pfizer and Jounce Therapeutics carving out their niche in that area. Pfizer developed Bosulif for the treatment of adult patients with Philadelphia chromosome-positive chronic myelogenous leukemia with resistance, or intolerance to prior therapy.
The Celgene deal comes on the heels of AstraZeneca reporting earnings losses due in large part to losing patent protection for two of its top-selling drugs, Nexium, used o treat acid reflux, and cholesterol pill Crestor. Additionally, Bloomberg News reported sales for AstraZeneca’s new drugs have not grown as quickly as the company hoped. Sales are not expected to return until 2017, Bloomberg reported. is slightly down this morning, currently trading at $71.55 per share, down from Thursday’s close of $73.18.
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