Astellas, Ambrx Tie-Up on ADC - Analyst Blog

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Astellas Pharma, Inc. ( ALPMY ) recently announced a deal with Ambrx Inc. for the discovery and development of novel antibody drug conjugates (ADC).

Terms of the Deal

As per the agreement, Ambrx is entitled to an upfront payment of $15 million. Moreover, Ambrx could earn up to an additional $285 million on the achievement of research, development, regulatory and sales-based milestones for a number of targets for ADCs in oncology.

In return, Astellas will have global rights for the development and commercialization of ADCs for oncology. A part of the milestones plus royalties on any net sales will depend on the eventual success of products developed under this partnership.

Our Take

We are positive on this collaboration which should help expand Astellas' capability in the development of ADCs for oncology.

Astellas currently has AGS-16M8F/AGS-16C3F for renal cancer, ASG-5ME for prostate cancer as well as pancreatic cancer and ASG-22ME for solid tumors in its pipeline. All three are in phase I. In Jan 2013, data was announced from a phase I clinical study evaluating ASG-5ME for the treatment of metastatic pancreatic ductal adenocarcinoma (PDA).

ADCs have been attracting a lot of interest in the recent past with major companies entering into collaborations. Seattle Genetics ( SGEN ) is a key player in this field and has collaborations with many companies like Roche Holding AG 's ( RHHBY ) Genentech and Astellas for the development of ADCs.

Astellas carries a Zacks Rank #4 (Sell). Currently WuXi Pharma Tech (Cayman) Inc. ( WX ) looks more attractive with a Zacks Rank #1 (Strong Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ADC , ALPMY , RHHBY , SGEN , WX

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