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Allergan signs $1.5bn licensing deal for AstraZeneca’s inflammatory diseases drug

Allergan could pay as much as $1.52bn to MedImmune, the global biologics research and development arm of AstraZeneca, for the worldwide rights to an inflammatory diseases drug.

The drug, MEDI2070, is currently being tested in mid-stage clinical trials for patients with moderate-to-severe Crohn’s disease and ulcerative colitis.

The licensing agreement will include an initial payment of $250m. After the initial fee, Allergan will pay up to $1.27bn over 15 years in payments that include milestone payments of up to $435m and sales-based milestone payments of $725m, plus tiered royalties on product sales.

Amgen, which has been collaborating with MedImmune on the development of MEDI2070, will receive a third of all payments and royalties received from Allergan.

MedImmune executive vice president Bahija Jallal 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.”

AstraZeneca said it will not retain a significant ongoing interest in MEDI2070, any revenue will be reported as other operating income in its financial statements.

The company also noted that the deal does not affect its financial guidance for 2016.

Allergan chief research & development officer David Nicholson said: “MEDI2070 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 deal expands Allergan's gastroenterology pipeline into inflammatory bowel disease.

Image: MedImmune, Gaithersburg USA. Photo: courtesy of AstraZeneca.