Sector News

Allergan axes AstraZeneca deal, clearing path for AbbVie merger

January 28, 2020
Life sciences

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

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

January 23, 2021

Thermo Fisher Scientific acquires Novasep’s Henogen for $874.5m

Life sciences

Thermo Fisher Scientific has acquired Novasep’s viral vector manufacturing business in Belgium, Henogen, for about €725m ($874.5m) in cash. Henogen offers biotechnology firms, as well as biopharma customers contract manufacturing services for vaccines and therapies.

January 23, 2021

Lilly and Merus partner to develop T-Cell re-directing antibody therapies

Life sciences

Research and development group of Eli Lilly and Company, Loxo Oncology at Lilly, and clinical-stage oncology company Merus have announced a research collaboration and exclusive license agreement to develop T-Cell re-directing bispecific antibodies.

January 23, 2021

Adagene plans $125M IPO to go after cancer niches targeted by BMS and Pfizer

Life sciences

Chinese cancer biotech Adagene has filed to raise up to $125 million in a Nasdaq IPO. The listing will give Adagene the means to run early-phase clinical trials of antibodies against CD137 and CTLA-4.

Send this to a friend