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AZ inks $815m deal for FibroGen anaemia drug

Deal comes as company reveals second quarter performance

AstraZeneca AZ headquarters London UK

AstraZeneca (AZ) has signed another big-ticket deal to bulk up its pipeline, paying $350m upfront for rights to a drug developed by FibroGen for anaemia associated with chronic kidney disease (CKD).

The drug is an orally administered small molecule inhibitor of hypoxia-inducible factor prolyl hydroxylase (HIF-PHI) and offers an alternative to injectable treatments based on erythropoietin (EPO), which account for a global market for around $8bn. It is the most clinically advanced candidate in this new class of potential anaemia drugs.

AZ will also pay $465m in milestones in return for rights to FG-4592 in the US, China and various other world markets, as well as royalties of 20 per cent or more on sales should it reach the market, and will also pick up the tab for future development of the drug in these markets.

The deal excludes rights in Europe, Japan, the Commonwealth of Independent States (CIS), the Middle East and South Africa, which are all covered by an existing $765m agreement between FibroGen and Astellas Pharma signed in 2008.

Yesterday, Astellas and FibroGen announced they are starting a phase II trial of FG-4592 in Japan in CKD patients on dialysis, with a non-dialysis study planned for later in the year. The announcement sparked a $12.5m milestone payment to FibroGen.

High price

Commenting on the deal, Savvas Neophytou of Panmure Gordon said: "It's a big price … but this was a highly sought after asset and AZ has another phase III product in its pipeline".

AZ has been spending heavily to shore up its flagging pipeline since CEO Pascal Soriot started an overhaul of the company's R&D operations earlier this year in the wake of a series of pipeline failures and patent expiries.

Most recently the firm snapped up respiratory specialist Pearl Therapeutics in a deal valued at up to $1.15bn, having previously forged collaborations with Moderna Therapeutics, the Karolinska Institutet and Oxford Cancer Biomarkers, as well as a licence agreement with Bind Therapeutics and the purchase of US biotechs AlphaCore Pharma and Omthera Pharmaceuticals.

There are also persistent rumours that AZ is planning a bid for Korean biosimilar specialist Celltrion, which is closing on approval of a generic version of Johnson & Johnson's $6bn arthritis and Crohn's disease treatment Remicade (infliximab) in Europe.

Phase II clinical studies of FG-4592 have shown it can correct anaemia in treatment-naïve CKD patients not on dialysis, as well as maintain haemoglobin levels and tackle anaemia in patients on dialysis, said AZ.

The two companies plan to undertake an extensive FG-4592 phase III development programme for the US, and to initiate phase III trials in China, with anticipated regulatory filings in China in 2015 and in the US in 2017.

Soriot said FG-4592 is "an important addition to AZ's growing late-stage portfolio in cardiovascular and metabolic disease", adding: "we aim to offer a first-in-class, convenient treatment option for doctors and patients".

Meanwhile, Neophytou said that a possible US launch for FG-4592 in 2018 could mitigate the risk of generic competition to AZ's big-selling cholesterol drug Crestor (rosuvastatin), which could occur from 2016 depending on the outcome of patent litigation.

Q2 results as expected

AZ just reported second-quarter results which included a 4 per cent decline in revenues to $6.23m, with Crestor only slightly down in the quarter to $1.48bn despite the impact of competition from generic versions of Pfizer's Lipitor (atorvastatin).

Growth of 11 per cent for gastrointestinal drug Nexium (esomeprazole) to $1.02bn helped AZ overcome $500m in lost sales to generic competition to several key brands. Operating profit in the second quarter was down 10 per cent at $2.06bn, just about in line with analyst expectations.

1st August 2013

From: Research

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