AstraZeneca has signed a new agreement to develop and commercialise Japanese company Daiichi Sankyo ’s trophoblast cell-surface antigen 2 (TROP2)-directed antibody drug conjugate (ADC), DS-1062, globally for various tumour types.

Currently, the drug candidate is in Phase I clinical development for non-small cell lung cancer (NSCLC) and triple-negative breast cancer (TNBC), which are therapeutic areas of strategic focus for AstraZeneca.

Based on Daiichi Sankyo’s DXd ADC technology, DS-1062 selectively delivers chemotherapy to cancer cells and decrease systemic exposure.

Daiichi Sankyo representative director, president and CEO Sunao Manabe said: “DS-1062, one of our lead DXd ADCs that will form a pillar of our next mid-term business plan, has the potential to become a best-in-class TROP2 ADC in multiple tumours, including lung and breast cancers.

“This new strategic collaboration with AstraZeneca, a company with extensive experience and significant expertise in the global oncology business, will enable us to deliver DS-1062 to more patients around the world as quickly as possible.”

The partners agreed to jointly develop and commercialise DS-1062 globally, except in Japan, where Daiichi Sankyo will hold exclusive rights. The Japanese company will manufacture and supply the drug candidate.

Previously, the companies signed a global ADC partnership in March last year for Daiichi Sankyo’s Enhertu.

AstraZeneca CEO Pascal Soriot said: “We see significant potential in this antibody drug conjugate in lung, as well as in breast and other cancers that commonly express TROP2.

“We are delighted to enter this new collaboration with Daiichi Sankyo and to build on the successful launch of Enhertu to further expand our pipeline and leadership in oncology.”

Under the deal, AstraZeneca will pay Daiichi Sankyo an upfront payment of $1bn in staged transactions, with $350m due upon completion, $325m after 12 months and $325m after 24 months from the agreement’s effective date.

In addition, AstraZeneca will pay conditional amounts of up to $1bn for successful regulatory approvals and up to $4bn for sales-related milestones.

The partners will share equally development and commercialisation costs and profits associated with DS-1062 globally, except for Japan, where Daiichi Sankyo will be responsible for the costs and AstraZeneca will receive royalties.

Daiichi Sankyo will book sales in the US, certain European and some other markets where Daiichi Sankyo has affiliates. Meanwhile, AstraZeneca is expected to record sales in other global markets.

The agreement became effective today, without any closing conditions.