Allergan has terminated a deal with AstraZeneca to clear a regulatory barrier to its pending merger with AbbVie. The terms of the termination return the rights to brazikumab to AstraZeneca but leave Allergan on the hook for the cost of development in Crohn’s disease and ulcerative colitis.
AstraZeneca offloaded the rights to the anti-IL-23 antibody, also known as MEDI2070, to Allergan in 2016 for $250 million (€227 million) upfront and more than $1 billion in milestones. Allergan went on to start phase 2b and 2b/3 clinical trials in ulcerative colitis and Crohn’s in 2018, setting it up to learn how the drug compares to potential rivals including AbbVie’s blockbuster Humira.
However, AbbVie’s bid to acquire Allergan in a $63 billion deal created a problem for the program. As AbbVie already has an approved IL-23 drug, Skyrizi, its attempt to add a similar molecule to its R&D pipeline was likely to raise red flags at competition watchdogs.
Sure enough, the U.S. Federal Trade Commission and the European Commission made their approvals of the merger contingent on actions including the divestiture of brazikumab. The deal with AstraZeneca sets AbbVie and Allergan up to meet that approval requirement and close their merger in the first quarter.
AstraZeneca looks to be regaining rights to brazikumab without taking on much risk. No financial figures are mentioned in the companies’ statements about the deal. The only reference to money is favorable to AstraZeneca
“Allergan will fund up to an agreed amount, estimated to be the total costs expected to be incurred by AstraZeneca until completion of development for brazikumab in [Crohn’s] and [ulcerative colitis], including the development of a companion diagnostic,” AstraZeneca wrote in its statement to disclose the deal.
The statement suggests AbbVie will fund development of a potential competitor to Skyrizi and other drugs in its portfolio of immunology products. Analysts at Jefferies reached the same conclusion, calling the deal “essentially a ‘free’ new pipeline option.” If the R&D program leads to approvals, AstraZeneca will pay royalties to Amgen under the terms of the 2012 agreement that gave rise to brazikumab.
By Nick Paul Taylor
Source: Fierce Biotech
Avivi joins Bayer fresh off a yearlong stint as chief marketing officer of Advance Auto Parts, which followed about three years spent as marketing chief of another auto parts company, Tenneco. Rounding out her nearly 30-year career in marketing are leadership roles at consumer goods giants Kimberly-Clark and Procter & Gamble.
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