LONDON – Astrazeneca plc is broadening its antibody drug conjugate (ADC) relationship with Daiichi Sankyo Co. Ltd. in a potential $6 billion development and commercialization deal.

The two companies are to work together on DS-1062, Daiichi’s trophoblast antigen2 (TROP2) ADC, which is in phase I development in multiple tumors that express the cell surface glycoprotein. These include breast cancer and non-small cell lung cancer, areas of strategic focus for Astrazeneca.

The agreement builds on the March 2019 $6.9 billion pact between the two for Enhertu (trastuzumab deruxtecan), the HER2-targeted ADC now on course for blockbuster status, following FDA approval and U.S. launch at the end of last year.

Cambridge, U.K.-based Astrazeneca is paying $350 million up front, with a further $325 million at one year and $325 million two years into the deal.

Another $1 billion will be paid in milestones tied to regulatory approvals, with $4 billion to follow in sales related milestones.

The pair will jointly develop and commercialize DS-1062 worldwide, excluding Japan where Daiichi has exclusive rights. All costs will be shared equally, apart from in Japan. Similarly, profits will be divided 50:50 except in Japan, where Daiichi will pay Astrazeneca mid-single digit royalties.

Daiichi is responsible for manufacturing and supply of DS-1062.

The new collaboration adds to Astrazeneca’s significant investment in ADCs as a class, a strategy initiated in 2013 to add value to its Medimmune antibody arm. At that point it stuck a first toe in the water in a preclinical collaboration with ADC Therapeutics SA to jointly develop two ADCs, at the same time acquiring the Swiss company’s ADC linker specialist Spirogen.

Pascal Soriot, Astrazeneca CEO, said the new agreement adds another potential blockbuster to the portfolio and will build on the successful launch of Enhertu. “We see significant potential in [DS-1062] in lung as well as in breast and other cancers that commonly express TROP2,” said Soriot.

Daiichi CEO Sunao Manabe said DS-1062 has the potential to be the best in class TROP2 ADC in multiple tumor types. The deal will allow the Tokyo-based company to get the drug to market worldwide as quickly as possible, he said. “As we have with Enhertu, we will jointly design and implement strategies to maximize the value of DS-1062.”