AstraZeneca is aiming to expand its presence in the oncology industry with a new drug rights acquisition.
The pharmaceutical company said on Thursday that it’s agreed to pay up to $6.9 billion for a cancer drug developed by Japanese drugmaker Daiichi-Sankyo. The sum includes an upfront payment of $1.4 billion and the possibility of paying the remaining $5.5 billion, as long as the drug meets certain development and sales milestones.
The drug is currently called DS-8201 and is designed to help treat breast, lung, and other cancers. It’s a targeted drug that only addresses cancerous tissue and leaves healthy tissue along, reducing chances of long-term negative effects on the human body. According to The Wall Street Journal, which earlier reported on the move, the drug could make $3 billion in annual revenue when it’s launched and in use.
In a statement, AstraZeneca chief Pascal Soriot said that DS-8201 “could become a transformative new medicine” for breast and gastric cancers and could ultimately be the first drug physicians turn to when addressing breast cancer.
Still, the drug isn’t necessarily going to be successful, which is why AstraZeneca will withhold some payments, pending successful milestones. The company said that the agreement between the companies isn’t contingent on closing conditions and will take effect on Friday. AstraZeneca said it will not affect its 2019 financial guidance.