The deal centers on Daiichi Sankyo’s proprietary trophoblast cell-surface antigen 2 (TROP2)-directed antibody drug conjugate (ADC) DS-1062, a potentially new treatment for multiple tumor types, which is currently in phase 1 clinical development for non-small cell lung cancer (NSCLC) and triple negative breast cancer (TNBC).

Using Daiichi Sankyo’s proprietary DXd ADC technology, DS-1062 is designed to deliver chemotherapy selectively to cancer cells and reduce systemic exposure.

“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 tumors, including lung and breast cancers,” said Sunao Manabe, representative director, president and CEO of Daiichi Sankyo.

A transmembrane glycoprotein, TROP2 is over-expressed in many cancers, including up to 80% of patients with TNBC, explained AstraZeneca, adding that research has also indicated that high TROP2 expression is associated with cancer cell growth and proliferation.

Daiichi Sankyo and AstraZeneca will jointly develop and commercialize DS-1062 worldwide, excluding Japan where the Tokyo-headquartered firm will maintain exclusive rights.

Under the terms of the transaction, AstraZeneca will pay Daiichi Sankyo an upfront payment of $1 billion in stages: $350 million is due on completion, with $325 million after 12 months and $325 million after 24 months from the effective date of the agreement, stated as Jul. 27.

In addition, AstraZeneca will pay additional conditional amounts of up to $1 billion for successfully achieving regulatory approvals and up to $4 billion for sales-related milestones.

The arrangement marks the second collaboration between the two drugmakers. In March 2019, the companies entered into a similar deal for Daiichi Sankyo’s ADC therapy DS-8201 that targets the HER2 protein typical of some breast cancers.

The drug, now sold as Enhertu, gained US approval last December for treating adults with unresectable or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 based regimens.