AstraZeneca to Pay Up to $440 Million for Spirogen
AstraZeneca Plc (AZN)’s MedImmune biotechnology unit bought closely held Spirogen Ltd. for an initial $200 million in one of two deals to expand the company’s research into a new type of cancer therapy.
MedImmune will pay an additional $240 million if Spirogen meets certain development goals, London-based AstraZeneca said today in a statement. In the second deal, the unit will pay $20 million for a stake in ADC Therapeutics Sarl, an amount to be matched by Auven Therapeutics, the majority shareholder of both London-based Spirogen and Lausanne, Switzerland-based ADC Therapeutics, AstraZeneca said.
The deals expand AstraZeneca’s pipeline in the field of antibody-drug conjugates, following competitors including Roche (ROG) Holding AG, Novartis AG and Bayer AG. (BAYN) The therapies marry antibodies, substances produced naturally by the immune system, with cancer-killing drugs. In conjugates, the antibody acts as a guided missile, binding to a target found on the surface of malignant cells and delivering a toxic payload that destroys the cancer without harming healthy tissue.
“It’s definitely a good deal for them,” Fabian Wenner, an analyst with Kepler Cheuvreux in Zurich, said in an interview, although he said AstraZeneca is yet to fully address the probable impact of generic competition on its biggest-selling drugs. “It doesn’t change the fact that AstraZeneca needs to repair its late-stage pipeline as it approaches the Crestor patent expiry,” he said.
AstraZeneca shares slipped 0.1 percent to close at 3,183 pence in London. The stock is up 9.4 percent this year, giving the pharmaceutical company a market value of 39.9 billion pounds ($63.7 billion).
“Antibody-drug conjugates are ground-breaking technologies,” Bahija Jallal, executive vice president of MedImmune, said in the statement. “The cutting-edge technologies developed by Spirogen and ADC Therapeutics complement MedImmune’s innovative antibody engineering capabilities, enabling us to accelerate antibody-drug conjugates” into human testing.
AstraZeneca will conduct research with ADC Therapeutics on two of the Swiss company’s conjugates in preclinical studies. Spirogen’s existing licensing agreements, such as one with Basel, Switzerland-based Roche, are excluded from the acquisition, AstraZeneca said.
Roche already has its first conjugate on the market: Kadcyla, a breast-cancer treatment. That drug was developed with U.S. partner ImmunoGen Inc. (IMGN), which signed an agreement on conjugates last week with Basel-based Novartis.
AstraZeneca has one drug in late-stage development for hairy cell leukemia which uses a similar technology. Moxetumomab pasudotox is an “armed antibody” that targets cancer cells and kills them from within, Edward Bradley, senior vice president and head of Oncology Innovative Medicines at MedImmune, said in an interview. The treatment was developed by Cambridge Antibody Technology, which was acquired by AstraZeneca in 2006. The U.S. Food and Drug Administration said only one late-stage trial would be necessary after 50 patients in a early-stage trial saw their tumors shrink and the disease had disappeared in more than half of them.
“Spirogen has one of the most potent warheads that makes it ideal for antibody conjugates,” Bradley said today. AstraZeneca plans to pair Spirogen’s technology with several antibodies in its preclinical pipeline, he said.
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