Enhertu and the AstraZeneca alliance — the turn to an oncology business (2019)

Sending its own technology into the world, in exchange for speed

The heart of this alliance is that Daiichi Sankyo, having created Enhertu itself, deliberately declined to take it worldwide alone and partnered with AstraZeneca even at the price of splitting the profit. Developing and selling a cancer drug on a global scale demands enormous capital, along with regulatory handling and sales networks in every country. For a company still searching for its next pillar after the merger, carrying that burden and that risk alone was heavy. In exchange for half the profit, it can be said, the company bought speed of development and reach across the world.

A design that shares the risk, however, shares the fruit of growth in the same measure. The more Enhertu grows worldwide, the more half of that profit goes to AstraZeneca, and splitting the costs that come with expanding sales holds down Daiichi Sankyo’s own margin. The next question is whether the ADCs following Enhertu — Datroway and the rest — can be raised in a form that leaves a larger share in the company’s hands. How fast its own technology reaches the world, and how much of the fruit it keeps: the Enhertu alliance was the bargain struck between those two.