AstraZeneca and Daiichi Sankyo have entered into a collaboration for the novel HER2-targeting antibody-drug conjugate, trastuzumab deruxtecan.

The companies aim to accelerate and expand development of trastuzumab deruxtecan across breast and other cancers, with an initial funding of $3.5 billion, but potential to reach $6.9 billion due to sales-related goals and regulatory milestones.

The collaboration is aligned with AstraZeneca’s science-led strategy in Oncology, which is based on four key scientific platforms: tumour drivers and resistance; DNA damage response; Immuno-Oncology; and ADCs.

The drug is currently in development for the treatment of multiple HER2-expressing cancers, including breast and gastric cancer, and in patients with HER2-low expression, and was granted Breakthrough Therapy Designation in 2017 by the US Food and Drug Administration (FDA) for the treatment of patients with HER2-positive, locally-advanced or metastatic breast cancer who have disease progression after trastuzumab emtansine.

Under the terms of the deal AstraZeneca will pay Daiichi Sankyo an upfront payment of $1.35 billion, half of which is due upon execution, with the remainder payable 12 months later.

Contingent payments of up to $5.55 billion include $3.8 billion for potential successful achievement of future regulatory and other milestones, as well as $1.75 billion for sales-related milestones, totalling around $6.9 billion.

“Trastuzumab deruxtecan is the flagship asset in our oncology pipeline created by our relentless pursuit of science and technology, the most important strengths of our company. Through the strategic collaboration with AstraZeneca, a company with a wealth of global experience and expertise in oncology, we will combine our respective skill sets to maximise the value of trastuzumab deruxtecan and accelerate the establishment of our global oncology business," said George Nakayama, representative director, chairman and chief executive, Daiichi Sankyo,

“By aiming to provide new treatment options across a wide range of cancers as soon as possible, we will maximise our contribution to patients with cancer and their families around the world.”

The first regulatory submission is scheduled for the second half of 2019.