) recently announced that it has entered into an agreement with
BIND Therapeutics for the development and commercialization of
Accurin (a cancer nanomedicine).
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As per the terms of the agreement, the companies will work
together to complete studies to support the investigational new
drug (IND) filing of Accurin. Post IND-filing, AstraZeneca will
enjoy exclusive rights (development and commercialization) to the
drug. In the development phase, BIND Therapeutics will undertake
AstraZeneca will make upfront and pre-approval milestone payments
totaling $69 million. Moreover, it has to shell out more than
$130 million in regulatory and sales milestones and other
payments apart from royalties (tiered single to double digit) on
net sales of Accurin.
We note that AstraZeneca is looking to combat generic erosion
faced by many of its key drugs by signing deals, making
acquisitions and developing new products. The recent
acquisition of biotech company AlphaCore Pharma is a move by
AstraZeneca in that direction.
Generic competition has adversely impacted AstraZeneca's revenues
over the past few quarters. This has put significant pressure on
the company. AstraZeneca is looking towards cost-cutting
initiatives to drive the bottom line in the face of
AstraZeneca initiated a major overhaul of its R&D and
selling, general and administrative (SG&A) segments last
month. As per the proposed plans, the company's R&D
activities will be primarily centered in three facilities
including UK (Cambridge), US (Gaithersburg) and Sweden (Mölndal).
The proposed initiative will result in relocation and termination
of approximately 2,500 and 1,600 roles, respectively, in the
2013-2016 timeframe and cost approximately $1.4 billion. The
SG&A segment will also be optimized with the help of
restructuring activities, which will result in the termination of
approximately 2,300 employees.
AstraZeneca, a biopharmaceutical company, carries a Zacks Rank #3
(Hold). Biopharma stocks like
) appear to be more attractive. All three stocks carry a Zacks
Rank #1 (Strong Buy).