) recently announced that MedImmune (the biologics research and
development arm of AstraZeneca) has entered into an agreement
with privately-held US-based company, NGM Biopharmaceuticals,
Inc. for discovery, development and commercialization of
candidates from NGM Biopharma's enteroendocrine cell (EEC)
program. Together, the companies will develop candidates for type
II diabetes and obesity.
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As per the terms of the agreement, NGM Biopharma will receive an
upfront payment and will be eligible to receive milestone
payments subject to achievement of certain development,
regulatory and commercial targets from AstraZeneca. AstraZeneca
will also provide research funding and pay royalties on net sales
of the products arising from this agreement.
We note generic competition has adversely impacted AstraZeneca's
revenues over the past few quarters. This has put significant
pressure on the company. AstraZeneca is looking to combat generic
erosion faced by many of its key drugs by signing deals, making
acquisitions and developing new products.
Its agreements with Karolinska Institutet (to conduct preclinical
and clinical trials for candidates targeting cardiovascular and
metabolic diseases), Moderna Therapeutics (to develop RNA
therapeutics for the treatment of serious cardiovascular,
metabolic and renal diseases and cancer) and BIND Therapeutics
(for development and commercialization cancer nanomedicine) are
efforts in that direction.
AstraZeneca entered into a number acquisition deals including
Omthera Pharmaceuticals, Inc.
) and AlphaCore Pharma in the last few months.
AstraZeneca carries a Zacks Rank #3 (Hold). Currently, companies
) look more attractive with a Zacks Rank #1 (Strong Buy).