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Tuesday, May 17, 2022

AstraZeneca [NYSE: AZN] Announces $6 Billion Cancer Drug Deal With Daiichi Sankyo

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AstraZeneca PLC announced Monday it has signed a $6 billion deal with Japan’s second-largest pharmaceutical company, Daiichi Sankyo for the making and introduction of new antibody-drug conjugate (ADC).

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The new deal inked among two companies for the making of DS-1062, TROP2 directed antibody-drug conjugate (ADC) of Daiichi, and for the new drugs for the treatment of various tumors type. British pharmaceutical company unveiled that the drug is currently in the development stage.

DS-1062 is currently in the making for the treatment of multiple tumors that typically exhibit cell surface glycoprotein TROP2. TROP2 is a transmembrane glycoprotein. It is differently exhibited in many cancers and it is overexpressed in many cancer cells.

TROP2 overexpression leads to the growth and proliferation of cancer cells. It is a promising target for the development process. While DS-1062 is a TROP2 directed ADC.

Shares of AstraZeneca soared 1.14% during the trading of Friday. It has a closing price of $55.80. In the past 52-weeks of trading, its stocks fluctuated between the low of $36.15 and a high of $64.94. AZN has moved up 54.36% from its 52-weeks low and moved down -14.07% from its 52-weeks high.

If we look at its profitability, it has a return on assets of 2.50%, return on investment of 8.30% and return on equity of 12.30%. British giant has a gross margin of 79.60%, a profit margin of 6.00%, and an operating margin of 12.10%. AZN has a market cap of 146.21 billion. If we look at its liquidity, it has a quick ratio of 0.60 and a current ratio of 0.80.

As per the contract, AstraZeneca will pay the upfront payment of $1 billion in staged payment, $350 million is due upon completion, $325 million after 12-months, and a $325 million after 24 months from the effective date of the contract. The British giant will pay $1 billion for the successful regulatory approval and will pay $4 billion for sales-related milestones.

Both the companies will jointly work to make and introduce DS-1062 worldwide except in Japan where Daiichi will maintain exclusive rights. As per the deal, both Daiichi and AstraZeneca will share all the expenses and the profits equally incurred in the development and commercialization of DS-1062.

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