AstraZeneca (NYSE:AZN) stock is sliding more than 5% on Friday following the company’s announcement that it had inked a deal to acquire the rights of a new cancer drug that will bolster its oncology branch.
The Cambridge, United Kingdom-based biopharmaceutical giant announced that it had reached a deal worth $6.9 billion with Japanese drugmaker Daiichi Sankyo (OTCMKTS:DSNKY) to improve its oncology department. The company won’t be buying the drug entirely, as it is instead paying for the shared rights of a new cancer drug with the name of DS-8201.
AstraZeneca said it plans on raising up to $3.5 billion through a share placing to fund the transaction, while also designed to pay down debt. The transaction is designed to build on the company’s legacy as a breast cancer treatment organization, while also helping it expand its treatment options for other mutant tumors.
The move marks forward movement from Jose Baselga, who joined the company in January as the new executive vice president for oncology research and development. Before joining AstraZeneca on the role, he was the physician-in-chief at Memorial Sloan Kettering Cancer Center, serving as the leader in early-stage clinical trials for a number of cancer therapies.
Company CEO Pascal Soriot believes that the company sees very strong synergy potential with the deal.
AZN stock is down about 5.9% on Friday. DSNKY shares were up about 26.1% on Friday.