AstraZeneca bets big on cancer drug

PARIS: AstraZeneca Plc agreed yesterday to buy a 55% stake in Acerta Pharma BV for $4 billion to gain a potential blockbuster cancer medicine.

The UK’s second-largest drugmaker will pay $2.5 billion upfront, and another $1.5 billion when Acerta’s experimental drug acalabrutinib is approved by a regulator or at the end of 2018, whichever comes first, according to a statement.

The agreement also includes options through which London-based AstraZeneca can buy the rest of closely-held Acerta for about $3 billion.

The deal gives chief executive Pascal Soriot yet another promising new medicine as he seeks to bolster investors’ confidence after having turned down a takeover bid from Pfizer Inc last year.

Acerta’s acalabrutinib, a rival of Johnson & Johnson and AbbVie Inc’s Imbruvica, may garner peak annual sales of more than $5 billion, according to AstraZeneca.

The Acerta deal gives AstraZeneca a latestage medicine to treat patients across a range of blood cancers.

The drug shows promise against an incurable form of leukemia as well as diseases in which the body attacks itself, such as lupus.

Like Imbruvica, acalabrutinib belongs to a class of drugs called Burton’s tyrosine kinase inhibitors, which work by blocking the BTK enzyme from promoting proliferation and survival of malignant cells.

“It’s now in the most advanced phase of clinical tests for blood cancers and in earlier trials for multiple solid tumors,’’ AstraZeneca said.

In an earlier trial, it worked on a deadly form of leukemia with milder side effects than Imbruvica. Other drugmakers developing BTK inhibitors are Eli Lilly & Co together with Hanmi Pharmaceutical Co Ltd and Germany’s Merck KGaA.

Imbruvica, a pill first approved by US regulators in 2013, is projected to be a blockbuster with sales surpassing $1 billion for J&J as soon as next year.

Annual revenue from that drug will reach $4.07 billion by 2020, according to analyst estimates compiled by Bloomberg.

The Acerta deal will probably curtail Astra’s earnings until 2018 because of the need to invest in clinical trials and submissions for acalabrutinib and bolster them starting in 2019, Jo Walton, an analyst at Credit Suisse Group AG, wrote in a note to clients.