AstraZeneca’s latest deal: A $330M move to unload Rhinocort to J&J

Agreement is another step in AstraZeneca ongoing plan to strategically refocus on three key therapy areas

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LONDON—Let’s tick off the deals AstraZeneca has inked just this month to shed products and product candidates that don’t fit its current strategic plans. First, Oct. 3 saw AstraZeneca enter into a $1.5-billion (potentially) licensing deal with Dublin, Ireland-based Allergan for MEDI2070, an IL-23 monoclonal antibody that is currently in a Phase 2b trial for moderate-to-severe Crohn’s disease.
Next, on Oct. 4, the company announced it had entered into a $175-million agreement with Aralez Pharmaceuticals giving the Canadian company rights to the branded and authorized generic Toprol-XL—a beta-blocker medicine for the control of hypertension, angina and heart failure—in the United States.
Then on Oct. 5, a $150-million deal with New Jersey-based Insmed Inc. for early-stage respiratory drug AZD7986, a novel oral inhibitor of dipeptidyl peptidase I.
And now, a $330-million agreement with Cilag GmbH International—an affiliate of Johnson & Johnson—forged Oct. 7 for rights outside the United States to Rhinocort Aqua.
Under normal circumstances, I’d probably focus first on the Allergan deal, being the biggest one, but let’s start with the Cilag deal as the most recent and get back to that deal afterward.
Regarding Rhinocort, AstraZeneca has said that it will not retain an ongoing interest in the drug and that the deal is expected to be concluded later this calendar year. Why? Well, it’s all about focus right now.
“This agreement allows us to concentrate our efforts in respiratory as one of our three strategic therapy areas, on transforming the treatment of asthma and COPD, where budesonide remains a key component of our marketed as well as pipeline medicines,” said Mark Mallon, AstraZeneca’s executive vice president for global product and portfolio strategy.
Rhinocort Aqua is a nasal spray indicated for allergic and non-allergic rhinitis and for the treatment of nasal polyps. The active ingredient is the anti-inflammatory medicine budesonide.
As noted in a article about the Cilag deal and other recent AstraZeneca deals, “A focus on respiratory drugs has been key to AstraZeneca’s strategy, particularly since the $575-million acquisition of Takeda Pharmaceutical Company’s core respiratory business, including global rights to roflumilast, a treatment for chronic obstructive pulmonary disease (COPD). The company is also banking on its new COPD drug, Bevespi Aerosphere, to boost sagging revenue due to stiffer competition from other companies, including GlaxoSmithKline.”
Also important in AstraZeneca’s respiratory ambitions were positive Phase 3 clinical trial results earlier in the year for investigational asthma drug benralizumab.
Now, back to Allergan and MEDI2070. In addition to Crohn’s disease, for which the drug is currently in a Phase 2b trial, the candidate is also poised for a Phase 2 study in ulcerative colitis.
As hot as the gastrointestinal arena is for various companies right now, it falls outside AstraZeneca’s three main therapy areas right now of respiratory, cardiovascular/metabolic diseases and oncology. That said, AstraZeneca notes that its global biologics research and development arm, MedImmune, will continue the ongoing Phase 2 trials of MEDI2070 until a mutually agreed-upon transition date is set.
Under the terms of the agreement, Allergan will make an upfront payment to AstraZeneca of $250 million for the exclusive, worldwide licence to develop and commercialize MEDI2070. In addition, Allergan may make potential additional payments to AstraZeneca of as much as $1.27 billion, dependent on the achievement of agreed upon success-based development and sales-related milestones, and pay tiered royalties on potential sales of the medicine.
MedImmune has been leading the clinical development for MEDI2070 under a collaboration agreement AstraZeneca entered into with Amgen Inc. in March 2012. Under the conditions of this agreement, AstraZeneca will subsequently pay Amgen one-third of all payments and royalties received from Allergan. Amgen will also receive a single-digit percentage inventor royalty on MEDI2070.
“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,” said Bahija Jallal, executive vice president of MedImmune. “Allergan has significant experience in gastrointestinal and inflammatory diseases and is the right partner to progress the development and commercialisation of MEDI2070.”
Added David Nicholson, chief research and development officer for Allergan: “MEDI2070 represents an exciting addition to our ‘Open Science’ pipeline, adding an important new program currently being studied in Crohn’s disease, with potential across a number of inflammatory and autoimmune disorders. The MEDI2070 program 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 maximizing the potential benefit of this possible new treatment option for patients.”

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