AbbVie, Inc. (ABBV - Free Report) announced extension of its 2014 research and development (R&D) agreement with Calico Life Sciences to jointly discover and develop candidates to treat age-related diseases including neurodegeneration and cancer.
Calico is a San Francisco Bay Area based biotech company, backed by Alphabet Inc. (GOOGL - Free Report) . Since the companies first entered the deal, the partnership has produced more than two dozen early-stage programs. With the latest agreement, the collaboration has been extended for another three years.
Calico will be responsible for the early R&D programs until 2022 and will continue to advance the programs through phase IIa through 2027. AbbVie will continue to support Calico in early R&D stages and will have the option to manage late-stage development and commercial activities. The companies will be sharing costs and profits equally and contribute $500 million each additionally to the collaboration.
The deal strengthens AbbVie’s grip on the oncology segment. As it is, AbbVie has a strong position in the oncology market with drugs like Imbruvica, which it markets in partnership with J&J (JNJ - Free Report) .
Imbruvica, currently approved for quite a few indications, has multi-billion dollar potential and AbbVie is exploring the potential to expand Imbruvica’s label into solid tumors and autoimmune diseases. Several studies on Imbruvica are ongoing to evaluate the drug alone or in combination in different patient segments. AbbVie expects Imbruvica peak sales of more than $7 billion and revenues of about $5 billion in 2020.
AbbVie is also studying chronic lymphocytic leukemia (CLL) drug Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory CLL patient population, expand into earlier lines of therapy and other hematologic malignancies like multiple myeloma and AML. Data from the phase III MURANO study of Venclexta plus Roche’s (RHHBY - Free Report) Rituxan in relapse/refractory CLL presented in last September showed that the combination led to a profound improvement in progression free survival compared to Treanda plus Rituxan. Regulatory applications seeking approval for the combination use in this broader patient population were approved in the United States earlier this month. Label expansion for this indication should expand the patient population for Venclexta significantly and boost its commercial potential.
AbbVie’s shares have declined 4.8% this year so far compared with the industry’s decline of 4.9%.
AbbVie currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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