AstraZeneca PLC (LSE:AZN), Britain’s largest pharmaceutical company, has agreed a licensing deal with KYM Biosciences Inc for a potential drug treatment for gastric cancer.
The deal will be split into an upfront payment of US$63mln, tiered royalties of low double digits and sales-based add-ons of up to US$1.1bln.
The Cambridge-based company is expected to close the deal in the first half of this year and noted that it will not affect its 2023 financial guidance.
The drug, CMG901, is being tested in the first phase of clinical trials for the treatment of Claudin 18.2 positive solid tumours, including gastric cancer.
The preliminary tests have already indicated early signs of anti-tumour activity in the drug.
KYM Biosciences is a joint venture between Chinese pharmaceutical companies Lepu Biopharma and Keymed Biosciences.
Under the agreement, AstraZeneca will research, develop, manufacture, and commercialise the new drug worldwide.
“CMG901 strengthens our growing pipeline of antibody-drug conjugates and supports our ambition to expand treatment options and transform outcomes for patients with gastrointestinal cancers," said Puja Sapra, senior vice president of oncology research and development at AstraZeneca.
The putative treatment will add to a collection of treatments for gastric cancer that the FTSE 100 company already own -Imfinzi, Enhertu and Lynparza.
“We are pleased to announce our agreement with AstraZeneca” said Dr Bo Chen, chairman at KYM biosciences, adding “the global scope of this agreement has the potential to benefit patients in China, and throughout the world.”
AstraZeneca shares are currently down 2%, purchasable for £112.66.