) recently entered into a worldwide licensing agreement with
Merck & Co. Inc.
) for MK-1775, an oral small molecule inhibitor of WEE1 kinase.
MK-1775 is being developed for the treatment of patients with
P53-deficient ovarian cancer (phase IIa).
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As per the terms of the deal, AstraZeneca will make an upfront
payment of $50 million to Merck. Apart from this Merck will also
be eligible to receive development and regulatory milestone
payments, sales-related payments and tiered royalties on net
sales of MK-1775, on approval. AstraZeneca will undertake all
future development, manufacturing and marketing responsibilities.
This deal is in line with AstraZeneca's strategy of boosting its
pipeline by acquiring candidates. Generic competition has been
adversely impacting AstraZeneca's revenues over the past few
quarters. This has put significant pressure on the company.
In a bid to add late-stage candidates to its pipeline,
AstraZeneca entered into a number of acquisition deals (Pearl
Therapeutics and Omthera Pharmaceuticals) in the last few months
and agreements with companies such as FibroGen, Inc.
We believe the licensing of MK-1775 makes strategic sense. With
this acquisition, AstraZeneca will strengthen its oncology
pipeline. Last month, AstraZeneca entered into an agreement to
acquire privately-held U.S. based company, Amplimmune. The
acquisition will add oncology candidates such as AMP-224 (phase
Ib) and AMP-514 (late-stage pre-clinical trial with
investigational new drug filing planned by year end) to
AstraZeneca currently carries a Zacks Rank #4 (Sell). At present,
) look well-positioned with a Zacks Rank #2 (Buy).