) recently entered into a collaboration with Cambridge-based,
privately-held Moderna Therapeutics for the discovery,
development and commercialization of messenger RNA therapeutics.
The companies will develop messenger RNA therapeutics for the
treatment of serious cardiovascular, metabolic and renal diseases
As per the terms of the agreement, Moderna is entitled to receive
an upfront payment of $240 million from AstraZeneca.
Additionally, Moderna will receive potential technical milestone
payments of $180 million.
In exchange, for up to five years, AstraZeneca has the exclusive
right to choose any cardiometabolic disease target and selected
oncology targets for the development of messenger RNA.
The company possesses an option to select up to 40 candidates
under the agreement and will be responsible for their development
(preclinical and clinical) and commercialization.
Moderna Therapeutics will design and manufacture the messenger
RNA against targets selected by AstraZeneca. AstraZeneca will be
obligated to pay milestone payments on the achievement of
development and commercialization targets. The company will also
make royalty payments (high single digits to low double digits)
on net sales of the products developed under the collaboration.
Meanwhile, AstraZeneca recently announced its plans to create an
integrated translational research centre in collaboration with
Sweden-based medical university Karolinska Institutet. The
research center will be located at Karolinska Institutet's site
in Stockholm, Sweden and is expected to be functional by
The research center will conduct preclinical and clinical trials
for candidates targeting cardiovascular and metabolic diseases.
The center will work on the evaluation of candidates for
AstraZeneca's biotech units (AstraZeneca Innovative Medicines and
Early Development and MedImmune).
We note that AstraZeneca is overhauling its research and
development operations. Just a few days back, it announced its
plans to initiate strategic reforms in its research and
development (R&D) segment.
We believe that the collaborations along with the restructuring
initiative reflect AstraZeneca's efforts to cut down on cost
while maintaining its focus on R&D. AstraZeneca, through
these initiatives, is looking to combat the generic competition
faced by the company. Generic competition has adversely impacted
AstraZeneca's revenues over the past few quarters. Moreover, the
company is slated to face generic erosion for products including
Nexium and Crestor in next few years.
AstraZeneca carries a Zacks Rank #3 (Hold). However, other large
cap pharma stocks such as
Eli Lilly and Company
) currently look more attractive with a Zacks Rank #2 (Buy).
Another pharma stock that looks attractive is
). Qlt Inc. is a Zacks Rank #1 (Strong Buy) stock.
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