For quite some time, AstraZeneca (AZN) has been entering into licensing deals to strengthen its pipeline, the latest being with Rigel Pharmaceuticals. The two companies recently announced a worldwide license agreement to develop and commercialize fostamatinib disodium (R788), a late-stage candidate indicated for the treatment of rheumatoid arthritis (RA) and other indications.
Under the deal, AstraZeneca will receive the development and global commercialization rights of the drug for an upfront payment of $100 million with another $345 million to be paid on the achievement of certain milestones. Moreover, Rigel is eligible to receive an additional $800 million on achievement of certain sales targets as well as double-digit royalties on global sales of the drug. In addition, AstraZeneca will receive rights to Rigel’s portfolio of oral Syk inhibitors as well as for additional indications for R788, apart from RA.
AstraZeneca plans to initiate a global phase III study with R788 in the second half of 2010. The company is looking to file a new drug application with the US Food and Drug Administration (FDA) and the European Medicines Agency (EMEA) in 2013.
RA is a systemic auto-immune inflammatory disease damaging the joints and other organs. Successful commercialization of the drug will enable the company to generate strong revenues due to the huge potential of the RA market. According to estimates, globally, the RA market has grown to approximately $13 billion in 2009 compared to $1.3 billion in 1998.
AstraZeneca is facing a number of challenges as many of its products are slated to lose patent exclusivity in the next few years – Atacand and Arimidex in 2010, followed by Seroquel and Symbicort in 2011 and 2012. Recently, the company announced a major restructuring initiative which should improve the company’s bottom line in the near-term. However, it will not be sufficient to compensate for continued revenue deterioration beyond 2010. This puts significantly more pressure on AstraZeneca to commercialize its late-stage pipeline.
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