The drug’s name is AGI-1067, it targets atherosclerosis, and it may be worth up to $1 billion to Atlanta-based AtheroGenics.
The Georgia firm (Nasdaq: AGIX) said Thursday it had signed a lucrative licensing deal with AstraZeneca for the development and commercialization of the compound.
AGI-1067 is involved in a Phase III clinical trial. It targets hardening of the arteries, one of the primary causes of heart attack and stroke. AGI-1067 is an anti-inflammatory drug that is taken orally.
The news sent AtheroGenics stock soaring. By the end of the day Thursday some 13 million shares had been traded, the stock pricing climbing 19.6 percent, or $3.24, to close at $19.74.
As part of the deal, AtheroGenics gets an upfront fee of $50 million. Another $300 million will be paid by AstraZeneca based on development and regulatory milestones. Sales-performance milestones for another $650 million were set, pushing the potential value of the deal to $1 billion.
Also as part of the deal, AtheroGenics will build a 125-person sales force with AstraZeneca providing funding for a minimum of three years.
“The benefit of this collaboration goes well beyond the obvious financial rewards and gives us the opportunity to access AstraZeneca’s commercial expertise as we establish our own sales and marketing group in preparation for the next phase of our corporate growth,” said Russell Medford, chief executive officer of AtheroGenics, in a statement.
AtheroGenics’ strategy calls for it to evolve from a research and development company into what it calls a “commercial enterprise”.
AstraZeneca said AGI-1067 has “substantial market potential” and described the deal as “a reasonable entry fee”.
“AGI-1067 has the real potential to further enhance our position among the leaders in cardiovascular medicine,” said John Patterson, executive director of development at AstraZeneca.
AGI-1067 is the lead compound for AtheroGenics, which was incorporated in Georgia in 1993.