AstraZeneca spares its WuXi-partnered drug in an R&D slash and burn

Pharma giant AstraZeneca ($AZN) has pulled the plug on a fleet of its in-development drugs but let live a rheumatoid arthritis treatment being codeveloped with Chinese CRO giant WuXi PharmaTech ($WX).

The drug, MEDI-5117, will no longer move forward in osteoarthritic pain, AstraZeneca said, but the WuXi-partnered RA program is still a go, preserving the CRO's chances of cashing in on what could be a hit drug in its home country.

Under the initial collaboration, WuXi and AstraZeneca's MedImmune unit entered a joint venture to develop MEDI-5117 in China for China, maintaining equal ownership until the drug reaches the market, at which point AZ would have the option to buy out its partner. In the meantime, WuXi will earn revenue based on services provided to the joint venture, and AZ will get milestone payments as the program progresses.

MEDI-5117 presents a significant bit of potential revenue for the fast-growing CRO, which has augmented its traditional offerings with a few risk-sharing drug development deals. And similar partnerships have become more and more popular across the industry, headlined by Ergomed's deals with Cel-Sci ($CVM) and Ferrer, inVentiv Health's collaboration with Oncobiologics and Pfizer's ($PFE) recent tie-up with Avillion.

For WuXi, however, standard CRO services are still keeping the lights on. In the third quarter, the company boosted net revenue by 16.6% to $146.7 million in the third quarter, fueled by a 9.2% jump in its lab services segment, which pulled in $108.1 million, and a 43.6% leap in its manufacturing business, which cleared $38.6 million on the period.

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