AstraZeneca has signed a $6.9 billion deal with Daiichi Sankyo for a single antibody-drug conjugate (ADC), trastuzumab deruxtecan. Based on the upfront payment, it is believed AstraZeneca is counting on the drug becoming mainstream in the next generation.

An ADC is a chemotherapy agent attached by molecular linker to an antibody focused on one particular cancer marker. Because of this the antibody places the toxic ingredient directly into the tumour, reducing negative effects on healthy cells.

Trastuzumab deruxtecan is currently in phase 2 development for HER2-expressing advanced colorectal cancer and metastatic non-squamous HER2-overexpressing or HER2-mutated non-small cell lung cancer, and in phase 1 development in combination with Merck’s Keytruda for HER2-expressing metastatic breast and bladder cancers.

Under the deal, AstraZeneca will pay Daiichi Sankyo $1.34 billion upfront, half due on execution and the rest payable one year later. Milestone payments could reach $5.55 billion. The two companies will split development and commercialisation costs worldwide, with Daiichi Sankyo retaining exclusive rights in Japan.

Pascal Soriot, CEO of AstraZeneca, said that: “We believe that trastuzumab deruxtecan could become a transformative new medicine for the treatment of HER2-positive breast and gastric cancers. In addition, it has the potential to redefine breast cancer treatment as the first therapy for HER2-low expressing tumours. It also has the potential to treat other HER2-mutated or HER2-overexpressing cancers, including lung and colorectal cancers. We are proud to be working with Daiichi Sankyo, a long-term collaborator of AstraZeneca in other disease areas.”