AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) has agreed to pay $600 million upfront to secure worldwide rights to a lung cancer pill developed by China's Dizal Pharmaceutical.
The Cambridge-based drugmaker could pay a further $900 million if the treatment hits certain development, regulatory and sales targets.
Dizal will also receive a share of future global sales.
The drug, sold under the brand name Zegfrovy, is a once-daily tablet that treats a common form of lung cancer.
It targets non-small cell lung cancer, which accounts for around 80% to 85% of all lung cancer cases.
Specifically, it is designed for patients whose tumours carry a genetic fault known as an exon 20 insertion mutation, an error in the DNA that helps drive cancer growth.
Such patients have historically had few targeted treatment options.
The pill works by blocking a protein called EGFR, which sits on the surface of cells and can fuel the growth of tumours when it malfunctions.
Zegfrovy is already approved in the United States and China for patients whose cancer has returned after standard chemotherapy.
The deal hands AstraZeneca the rights to sell and further develop the drug everywhere else in the world.
Dave Fredrickson, who runs AstraZeneca's oncology business, said the treatment would give patients with limited options a differentiated oral therapy.
Xiaolin Zhang, chief executive of Dizal, said the larger partner would help bring the drug, discovered by Chinese scientists, to patients globally.
The agreement adds to AstraZeneca's existing stable of lung cancer medicines, which includes its blockbuster tablet Tagrisso.
Dizal recently reported positive results from a late-stage trial testing Zegfrovy as a first treatment for newly diagnosed patients, rather than only after chemotherapy has failed.
Those findings were presented at a major cancer conference and published in the New England Journal of Medicine.
On the strength of that data, applications to expand the drug's approved use have been filed with regulators in both the United States and China.
The transaction is expected to complete in the second half of 2026, subject to regulatory clearance.
AstraZeneca said the deal would not affect its financial guidance for the year.
Lung cancer remains the leading cause of cancer death worldwide, accounting for roughly one in five such deaths.
