AstraZeneca, a British-Swedish pharmaceutical company, announced a licensing agreement with Chinese company Eccogene to develop and commercialize ECC504, an experimental weight-loss pill. AstraZeneca will pay Eccogene $185 million upfront, with the potential for an additional $1.825 billion in future milestones and royalties. The deal gives AstraZeneca exclusive global developmental and commercialization rights to ECC504 except in China, where Eccogene has the right to work with AstraZeneca to produce the drug.
The announcement of the deal comes a day after Eli Lilly received US regulatory approval for Zepbound, an injectable weight-loss drug. Zepbound is the second drug in a new class of drugs that have shown to be highly effective in helping patients lose weight. Market demand for these drugs is expected to be high, as obesity is a major health problem globally.
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In addition to the licensing agreement, AstraZeneca also reported third-quarter earnings per share (EPS) of $1.73, with revenue increasing 4% from a year ago to $11.49 billion. Both EPS and revenue exceeded expectations. However, sales were held down by falling demand for the company’s COVID-19 medicines.
AstraZeneca also raised its full-year guidance for revenue and earnings. The company now expects revenue to grow at a mid-single-digit percent rate, up from the previous low-to-mid-single digit percent outlook. Excluding COVID-19 medicines, sales are expected to go up by a low-teens percent, as opposed to the earlier low-double-digit percent outlook. Core EPS is anticipated to be higher by low-double-digit to low-teens percent, compared to the earlier high-single-digit to low-double-digit percent estimate.
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Overall, the news from AstraZeneca is positive. The company has a new weight-loss drug in its pipeline, which could be a major growth driver in the future. Additionally, the company is raising its full-year guidance, indicating that it is confident in its business outlook.
