AstraZeneca will pay up to $6 billion to Japan's Daiichi Sankyo under the drugmakers' second multi-billion dollar oncology collaboration to develop and market a niche type of targeted cancer treatment.
London-listed AstraZeneca said on Monday it would make an upfront payment of $1 billion to Daiichi for an experimental drug called DS-1062, which belongs to a newer class of treatments called antibody drug conjugates (ADC).
Further payments would depend on regulatory and sales milestones being achieved.
The deal underscores AstraZeneca's push to bolster its portfolio of cancer therapies, particularly ADCs - a major area of focus for the company as it also ploughs on with its coronavirus vaccine candidate.
"We see significant potential in this antibody drug conjugate in lung as well as in breast and other cancers that commonly express TROP2," said Pascal Soriot, AstraZeneca's chief executive, referring to a protein on cancer cell surfaces.
DS-1062 belongs to the ADC category of drugs, which link powerful cell toxins to antibodies that cling to cancer cells and spare healthy cells that are damaged during conventional chemotherapy treatments.
It targets the TROP2 protein typically seen in up to 80% of patients with triple-negative breast cancer, and also has been identified in a majority of the most common type of lung cancer.
In a further boost to AstraZeneca's oncology unit, two of its on-market therapies, one for lung cancer and another for blood cancer, won regulatory endorsements for expanded use in Europe.
The company and Daiichi had signed a near $7 billion deal in 2019 for an ADC targeting the HER2 protein typical of some breast cancers, to challenge the world's biggest cancer drug maker Roche. The drug is now sold as "Enhertu".
AstraZeneca and Daiichi have also been in talks over the supply of the British company's potential coronavirus vaccine in Japan.
Shares of AstraZeneca, which said the deal would not affect its 2020 earnings forecast, were up 0.6% at 8,704 pence by 0817 GMT.