Shares in pharmaceutical giant AstraZeneca (AZN) gained 0.9% to £86.85 after the company sealed a commercialization agreement with Ionis Pharmaceuticals for the development and sale of eplonsteren which is in late stage trials.
The companies have agreed to jointly develop the drug in the US while Astra will develop and commercialise it in the rest of the world except Latin America.
The financial terms include Astra making an upfront payment of $200 million and further payments of up to $485 million conditional on the drug receiving regulatory approvals.
In addition, it will pay up to $2.9 billion of sales-related milestone payments based on thresholds of between $500 million and $6 billion as well as mid-double digit to low teens royalty payments, depending on the region.
CORE EARNINGS UNAFFECTED
Astra said the transaction would be funded from cash resources and would not impact its 2021 core earnings guidance. The reason is that for accounting purposes, the transaction will be treated as an acquisition of an intangible asset with potential future milestone payments capitalized against the asset as they occur.
Ionis will continue to manufacture and supply eplonsteren for ongoing clinical trials while Astra will be responsible for commercial supply of the drug with the timing of the transition to be agreed upon by both parties. All revenues from eponsteren will be booked by Astra.
UNMET NEED
Eplontersen is an investigational drug developed to reduce the production of the protein transthyretin in order to treat both hereditary and non-hereditary forms of TTR amyloidosis, a systemic, progressive and fatal disease.
The non-hereditary form of the disease is a progressive and fatal condition that can lead to heart failure and death within four years of diagnosis.
The hereditary form is a debilitating disease that leads to peripheral nerve damage with motor disability within five years of diagnosis, and without treatment is generally fatal within a decade.
Worldwide there are an estimated 300,000 to 500,000 cases of the non-hereditary form of the disease and between 10,000 and 40,000 cases of the hereditary form, according to sources provided by the company.
