AstraZeneca & Ionis Conclude Eplontersen Commercialization Agreement

AstraZeneca (AZN) and Ionis Pharmaceuticals, Inc. (NASDAQ: IONS) have announced the closure of their global development and commercialization agreement for eplontersen, formerly known as IONIS-TTR-L. The closure followed the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Eplontersen is Ionis’ investigational antisense medicine designed to treat transthyretin amyloidosis (ATTR), a systemic, progressive, and fatal disease. It will be jointly developed and commercialized by the companies in the U.S., while AstraZeneca will develop and commercialize it in the rest of the world, except in Latin America.

Ionis Pharmaceuticals is one of the leading Biotech stocks, while AstraZeneca is a British-Swedish multinational pharmaceutical and biotechnology company.

Financial Details

Per the terms of the agreement, AstraZeneca will make an upfront cash payment of $200 million to Ionis. Additional conditional payments of up to $485 million will be made by the company, pending regulatory approvals.

Furthermore, AstraZeneca will pay around $2.9 billion as milestone payments, along with royalties in the range of low double-digit to mid-20s percentage. Cost-sharing provisions for territory-specific development, commercial, and medical affairs are also included in the agreement.

The transaction will be funded with existing cash and is likely to be neutral to core earnings in 2021. Notably, it will not impact AstraZeneca’s financial guidance for the year.

Wall Street’s Take

Recently, Morgan Stanley analyst Mark Purcell maintained a Buy rating on AZN stock and increased the price target to GBP102 (18.45% upside potential) from GBP100.

Consensus among analysts is a Strong Buy based on 10 Buys, 1 Hold, and 1 Sell. The average AstraZeneca stock forecast of 9,750p implies 13.23% upside potential from current levels. Shares have gained 19.6% over the past year.

Smart Score

AstraZeneca scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.