AstraZeneca to raise ?2.7bn for cancer collab, bond repayment

(Sharecast News) - AstraZeneca plans to raise $3.5bn (£2.7bn) in a share placing to fund a new cancer drug collaboration with Japan's Daiichi Sankyo and repay some of its bonds.The collaboration is to accelerate the development of the Japanese company's novel HER2-targeting antibody-drug conjugate, trastuzumab deruxtecan, expanding the treatment across breast and other cancers.Astra will pay $1.35bn of the net placing cash to Daiichi Sankyo, of which half will be paid up-front and the rest in 12 months' time. There are also expected to be roughly $1bn of approval and sales-related contingent milestone payments starting from next year until 2022.Trastuzumab deruxtecan is currently in development for the treatment of multiple HER2-expressing cancers, including breast and gastric cancer, and in patients with HER2-low expression.In 2017, the US regulator awarded the conjugate was breakthrough therapy designation for the treatment of patients with HER2-positive, locally-advanced or metastatic breast cancer who have been treated with trastuzumab and pertuzumab and have disease progression after trastuzumab emtansine.Astra chief executive Pascal Soriot said: "We believe that trastuzumab deruxtecan could become a transformative new medicine for the treatment of HER2-positive breast and gastric cancers."In addition, it has the potential to redefine breast cancer treatment as the first therapy for HER2-low expressing tumours. It also has the potential to treat other HER2-mutated orHER2-overexpressing cancers, including lung and colorectal cancers. We are proud to be working with Daiichi Sankyo, a long-term collaborator of AstraZeneca in other disease areas."Another $1bn of the placing funds will be used to pay off its 1.95% bonds due on 18 September 2019, with the remainder of the placing proceeds held as cash to help strengthen the balance sheet.