Allergan ($AGN), not content with a series of big and small deals throughout the last month, has started October with, you’ve guessed it, another deal.
This time it will pay upfront a quarter of a billion dollars, and as much as an extra $1.27 billion in total if all targets are met, for an exclusive worldwide license to develop and commercialize MEDI2070 from AstraZeneca ($AZN). On top of the upfront payout, there is also a $435 million and sales-based milestone payments of up to $725 million.
The candidate is under testing for Crohn’s disease and could also be used against ulcerative colitis, with testing currently in Phase II.
AstraZeneca, through its MedImmune biologics unit, has been working on MEDI2070 for more than four years after signing a pact with Amgen ($AMGN) in 2012 to work on the med. This means that AstraZeneca will not see all the money from this deal, as it will need to stump up one-third of all of the payments coming out of the Allergan deal to Amgen.
Bahija Jallal, EVP at MedImmune, said: “This agreement demonstrates our sharp focus on three main therapy areas while creating value from the increased R&D productivity and innovative science in our pipeline through collaborations. Allergan has significant experience in gastrointestinal and inflammatory diseases and is the right partner to progress the development and commercialisation of MEDI2070.”
This comes as AstraZeneca seeks to narrow its R&D focus on cancer, respiratory, cardiovascular and metabolic diseases, and as the U.K.-based pharma seeks cash to help build up its pipeline in these areas and hit its own ambitious revenue numbers for the next decade.
David Nicholson, chief R&D officer at Allergan, added: “MEDI2070 represents an exciting addition to our Open Science pipeline, adding an important new programme currently being studied in Crohn’s disease, with potential across a number of inflammatory and autoimmune disorders.
“The MEDI2070 programme also reinforces Allergan’s commitment to bringing forward important innovations in the treatment of inflammation and autoimmune disorders where significant unmet need exists across many of our therapeutic areas. We look forward to bringing our significant clinical development and regulatory expertise to bear and maximising the potential benefit of this possible new treatment option for patients.”
Allergan, which in April escaped the clutches of a potential $160 billion merger deal from Pfizer ($PFE)--something AZ knows all about--has been racking up its own M&As and bolt-on pacts in 2016, with a slew coming in the last month alone.
This includes a $60 million upfront asset deal with gene therapy specialist RetroSense; a $639 million buyout of small-cap dermatology biotech Vitae; and then the up to $1.7 billion acquisition of Tobira and the most recent $50 million upfront for Akarna.
The company has felt the weight of its wallet since selling off its generics to Teva ($TEVA) for over $40 billion (which includes a 10% ownership in the Israeli generics giant) in July, although it still has a substantial amount of debt tied to the company.
Allergan was down slightly by the end of Friday, before the deal was announced, by 0.21%, while AstraZeneca was down 0.5%, but up premarket this morning by around the same amount after the news broke.