Monday 03 October 2016 3:34 pm

AstraZeneca licences Crohn’s disease treatment to Allergan for $1.5bn

Drug giant AstraZeneca has struck a deal with Ireland-based pharma firm Allergan to licence a treatment for Crohn's disease.

Allergan will pay $250m upfront and make further payments of up to $1.27bn depending on how the drug performs.

AstraZeneca's shares climbed on the news and were earlier up some 1.5 per cent in mid-morning trading. Shares have fallen back a little since then and were trading up by one per cent by late afternoon.

David Nicholson, chief research and development officer at Allergan, said:

[The drug] represents an exciting addition to our Open Science pipeline, adding an important new programme currently being studied in Crohn’s disease, with potential across a number of inflammatory and autoimmune disorders.

The … programme also reinforces Allergan’s commitment to bringing forward important innovations in the treatment of inflammation and autoimmune disorders where significant unmet need exists across many of our therapeutic areas.

Under terms of the deal, Allergan will have the global rights to an antibody for Crohn's disease.

Crohn’s disease is a chronic inflammation that may affect any portion of the digestive tract, although it is more common in the terminal small bowel and colon. There are mixed factors (genetic, immunological, environmental) factors that influence its occurrence, location and evolution. Currently there is no curative treatment although big steps are being taken to allow control of the inflammation and normal life to those who are affected," said Jorge Amil Dias, a gastroenterology specialist with Best Doctors, a service which offers second opinions from 50,000 leading doctors.

The choice of the ideal treatment is tailored to each case, taking into account severity, location and existing complications. As most treatments may affect immune function it is of great importance that exact diagnosis is made, by experienced physicians.

The drug is being developed by Astra's global biologics research and development arm MedImmune and is ready to begin trials.

MedImmune has been working with long-time Astra collaborator Amgen on the drug and Amgen is set to collect one third of all payments and royalties received under the deal. Amgen will also receive a single-digit percentage inventor royalty on the treatment.

Bahija Jallal, executive vice president, MedImmune, said:

This agreement demonstrates our sharp focus on three main therapy areas while creating value from the increased R&D productivity and innovative science in our pipeline through collaborations. Allergan has significant experience in gastrointestinal and inflammatory diseases and is the right partner to progress the development and commercialisation of [the drug].