9th Nov 2023 10:10
(Alliance News) - AstraZeneca PLC on Thursday said it struck a licence deal in the weight loss drug space, giving something to think about for Novo Nordisk AS, whose Ozempic and Wegovy products have laid down the gauntlet for the rest of the pharma space.
AstraZeneca has entered into an exclusive licence agreement for ECC5004 with biopharmaceutical firm Shanghai-based Eccogene. Eccogene gets USD185 million upfront and could receive an additional USD1.83 billion in future "clinical, regulatory, and commercial milestones and tiered royalties on product net sales".
AJ Bell analyst Russ Mould commented: "While this might be perceived as an attempt to jump on the coat tails of the likes of Novo Nordisk and Eli Lilly in what has become a booming market, AstraZeneca has form for adding strings to its bow – prior to the Covid pandemic it was not considered to have any particular expertise in vaccines, for example."
New York-listed Eli Lilly has also looked to make moves in the weight loss drug space. Late Wednesday, it said the US Food & Drug Administration approved its Zepbound injection for obesity treatment. The stock rose 0.3% after hours.
Eli Lilly will sell Zepbound at a list price of USD1,059.87 in the US, 20% lower than Wegovy.
The threat of competition for Novo Nordisk, a dominant force in the weight loss drug space, sent the firm's shares 1.5% lower in Copenhagen.
Hargreaves Lansdown analyst Derren Nathan said that it is not just in the obesity drug space that AstraZeneca is making waves.
"The market should take some reassurance from the strong commercial and clinical progress being made. Astra has an outstanding track record of delivering novel therapies and its not standing still. It's made two further deals this month. Eccogene is likely to grab the most attention given the markets obsession with GLP-1 obesity treatments. The idea of a magic pill for weight loss, as opposed to the current injectable options in the class, clearly has its commercial attractions. If successful, then the potential USD1.8 billion consideration may well be worth it. But given it's still in phase 1, there is a long path to follow. Meanwhile, the deal with Cellectis to develop up to 10 novel cell and gene therapy candidate products would seem a natural fit with Astra's impressive portfolio," Nathan explained.
Astra also outlined decent third-quarter results and a guidance hike.
Total revenue in the third quarter of 2023 rose 4.6% on-year to USD11.49 billion from USD10.98 billion. Pretax profit was 79% higher at USD1.65 billion from USD922 million, the drugmaker said.
AstraZeneca reported core earnings per share growth of 4% to US1.73. It now expects full-year core EPS growth in the "low double-digit to low-teens percentage" range at constant currency. It had previously predicted "high single-digit to low double-digit percentage" growth.
Astra shares rose 2.8% to 10,450.00 pence each in London on Thursday morning.
By Eric Cunha, Alliance News news editor
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