Rigel Pharmaceuticals, Inc.
) recently announced that they have entered into a licensing
agreement for Rigel's asthma candidate, R256. Per the terms of the
agreement, AstraZeneca will make an upfront payment of $1 million.
The value of the deal could extend to $100 million. Moreover,
AstraZeneca is obliged to make royalty payments to Rigel on net
sales of R256, following its approval.
In exchange of the payments made by AstraZeneca, the company
will get exclusive worldwide development and commercialization
rights to R256. AstraZeneca will undertake the responsibility of
further development of R256.
R256, an inhaled JAK inhibitor, has been developed for the
treatment of moderate-to-severe chronic asthma. In the preclinical
studies, R256 demonstrated promising efficacy in reducing airway
inflammation and improving lung function.
AstraZeneca's Respiratory & Inflammation segment boasts of
Symbicort for asthma and chronic obstructive pulmonary disease
(COPD) and Pulmicort for asthma. These two products together
contributed approximately 13% of AstraZeneca's total revenue. We
believe that the successful development and commercialization of
R256 will further strengthen AstraZeneca's Respiratory &
Neutral on AstraZeneca
We are encouraged by the company's focus on high-potential
emerging markets and are pleased with its effort to drive the
bottom line through cost-cutting initiatives and share
However, we remain concerned about the generic competition faced
by the company's key products. In 2011, the company lost revenues
worth almost $2 billion to generic competition. The weak late-stage
pipeline coupled with the slow Brilinta uptake also bothers us. We
currently have a Neutral recommendation on AstraZeneca. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.
ASTRAZENECA PLC (AZN): Free Stock Analysis
RIGEL PHARMCTCL (RIGL): Free Stock Analysis
To read this article on Zacks.com click here.