[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / October 4, 2016 / Active Wall St. blog coverage looks at the headline from AstraZeneca PLC (NYSE: AZN) and Allergan PLC (NYSE: AGN). Allergan announced on October 03rd, 2016, that it has entered into a licensing agreement with MedImmune, AstraZeneca's global biologics research and development arm, for the global rights to MEDI2070. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
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The Agreement
Under the terms of the agreement, AstraZeneca will receive an upfront payment of $250 million for the exclusive, worldwide license to develop and commercialize MEDI2070, and potentially additional payment of up to $1.27 billion, including launch milestone payments of up to $435 million and sales-based milestone payments of $725 million, as well as tiered royalties on sales of the product.
Meanwhile, AstraZeneca will have to share a third of all payments and royalties received with Amgen Inc., which has been collaborating with MedImmune on developing the medicine. Researchers at MedImmune in Gaithersburg, Maryland, have been leading the clinical development for MEDI2070 under a collaboration agreement AstraZeneca entered into with Amgen in March 2012.
What is Crohn's disease?
Crohn's disease and ulcerative colitis are chronic inflammatory conditions of the gastrointestinal tract. Crohn's disease most commonly affects the end of the small bowel and the colon, but it may affect any part of the gastrointestinal (GI) tract. It is estimated that 1.6 million Americans and 2.2 million Europeans suffer from Crohn's disease or ulcerative colitis.
What is MEDI2070?
MEDI2070 is in development as a next-generation IL-23-only targeted therapy for Crohn's disease and ulcerative colitis. Targeting IL-23 alone may allow for a broader therapeutic window compared to IL12/23 targeting therapies and may translate into better efficacy. MedImmune will continue the on-going MEDI2070 Phase IIa study in Crohn's disease to completion, and will transition the Phase IIb study in Crohn's disease to Allergan for completion.
"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," said David Nicholson, Chief Research & Development Officer at Allergan.
Bahija Jallal, Executive Vice President at MedImmune, said:
"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. Allergan has significant experience in gastrointestinal and inflammatory diseases and is the right partner to progress the development and commercialisation of MEDI2070."
Another Arrow in the Quiver
MEDI2070 adds to Allergan's position in gastroenterology, with marketed therapies to treat Irritable Bowel Syndrome-C (IBS-C), and Chronic Idiopathic Constipation (CIC), Irritable Bowel Syndrome-D (IBS-D) and Ulcerative Colitis. The acquisition also adds to Allergan's strategy to develop the next generation of autoimmune disorder treatments.
The transaction is expected to close in Q4 2016, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Stock Performance
AstraZeneca's share price finished yesterday's trading session at $33.00, slightly up 0.43%. A total volume of 3.09 million shares exchanged hands. The stock has advanced 10.91% and 18.21% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have gained 1.69%. The stock is trading at a PE ratio of 37.59 and has a dividend yield of 2.73%.
Allergan's stock is trading climbed 1.06%, closing Monday's session at $232.75 on volume of 3.15 million shares, which was higher than the 3 months average volume of 2.99 million shares. At the end of yesterday's session, the stock's market cap was at $92.35 billion.
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