AstraZeneca lends its oncology star to Celgene and recruits Innate in a PD-L1 deal spree

AstraZeneca ($AZN) signed a pair of agreements centered on its most prized cancer therapy, selling a stake to the hematology experts at Celgene ($CELG) and buying the rights to a complementary treatment from Innate Pharma.

The company's treatment, MEDI4736, is an antibody designed to block an immune checkpoint called PD-L1 to cut the brakes on the immune system and allow the body's natural defenses to attack tumors. And, in a pair of deals worth nearly $1.8 billion, AstraZeneca is broadening its development program and bringing in a pair of new collaborators.

AstraZeneca is already pushing the antibody forward in lung and other cancers, and now it wants to expand its focus to include liquid tumors. But instead of going it alone into new territory, the British drugmaker is looping in Celgene, which has a storied history of developing treatments for blood cancer. The Big Biotech is paying $450 million up front for the rights to develop MEDI4736 for non-Hodgkin's lymphoma, myelodysplastic syndromes, multiple myeloma and other related malignancies. In exchange, Celgene will get a 70% royalty on any sales of the antibody in hematology, a cut that will decrease to 50% over a period of four years.

Separately, AstraZeneca is sending some cash out the door to bring in an antibody it believes can work in tandem with MEDI4736's solid tumor program. The company is paying $250 million up front to France's Innate Pharma to license IPH2201, which also works by freeing up immune cells to go after cancers. Under the deal, AstraZeneca will develop IPH2201 as a monotherapy and in tandem with MEDI4736 across a range of cancers, plotting a slew of Phase II trials in the coming years. AstraZeneca has promised Innate Pharma another $100 million before the start of a Phase III effort, and the French company is eligible for $925 million more tied to milestones throughout the collaboration.

The pair of pacts comes just a day after AstraZeneca partnered up with Juno Therapeutics ($JUNO) to test that company's pioneering CAR-T technology with MEDI4736 in blood cancers. Like its rivals Merck ($MRK) and Bristol-Myers Squibb ($BMY), AstraZeneca believes the brightest future for PD-1 and PD-L1 therapies could be in tandem with other marketed or in-development treatments, and the company is widening its stable of partners in hopes of eventually getting MEDI4736 approved for a host of cancers.

AstraZeneca CEO Pascal Soriot

Analysts figure the whole class of checkpoint inhibitors can top out at about $35 billion a year, and AstraZeneca says its contender can eventually bring in $6.5 billion in peak annual sales.

"We believe that combination therapy in immuno-oncology has the potential to be one of the most effective ways of treating cancer and that by targeting both innate and acquired immunity we have the opportunity to deliver important clinical benefit to patients across a range of cancers," AstraZeneca CEO Pascal Soriot said in a statement

- read the Celgene announcement
- here's Innate Pharma news

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