AstraZeneca signs collaboration deal with Fibrogen to develop anemia drug

|About: AstraZeneca Group plc (AZN)|By:, SA News Editor

AstraZeneca (AZN +0.9%) inks a collaboration deal to develop an oral anemia drug with privately held U.S. biotechnology company FibroGen that could potentially be worth more than $815M.

The collaboration includes the development and commercialization of FG-4592, a drug that mimics the body's response to being at high altitude, which stimulates production of red blood cells and would be used to treat anemia.

AZN's is making an initial $350M payment to FibroGen, will could rise to as much as $815M if development milestones are reached, and possibly even exceed that with royalty payments on future sales in the low 20% range.

AZN has made $2.8B worth of acquisition and collaboration deals in the last six months alone in a bid to counteract the revenue-sapping effect of generic competition.

The deal is limited to the U.S., China and a few other markets, but excludes Europe, Japan and other markets where FibroGen already has an agreement with Astellas Pharma (ALPMY.PK).