Allergan plc announced that it has entered into a licensing agreement with MedImmune, AstraZeneca's global biologics research and development arm, for the global rights to MEDI2070.

MEDI2070 is an anti-IL-23 monoclonal antibody currently in phase IIb clinical development for the treatment of patients with moderate-to-severe Crohn's disease and is phase II ready for ulcerative colitis and other related conditions.

Under the terms of the agreement, Allergan will make an upfront payment to AstraZeneca of $250 million for the exclusive, worldwide license to develop and commercialize MEDI2070. In addition, Allergan may make potential payments to AstraZeneca of up to $1.27 billion, payable over a period of up to 15 years, including launch milestone payments of up to $435 million and sales-based milestone payments of $725 million, as well as tiered royalties on sales of the product.

MEDI2070 is in development as a next-generation IL-23-only targeted therapy for Crohn's disease and ulcerative colitis. Targeting IL-23 alone may allow for a broader therapeutic window compared to IL12/23 targeting therapies and may translate into better efficacy.

MedImmune will continue the ongoing MEDI2070 phase IIa study in Crohn's disease to completion, and will transition the phase IIb study in Crohn's disease to Allergan for completion.

"MEDI2070 represents an exciting addition to our Open Science pipeline, adding an important new program currently being studied in Crohn's disease, with potential across a number of inflammatory and autoimmune disorders. The MEDI2070 program also reinforces Allergan's commitment to bringing forward important innovations in the treatment of inflammation and autoimmune disorders where significant unmet need exists across many of our therapeutic areas," said David Nicholson, chief research & development officer, Allergan. "We look forward to bringing our significant clinical development and regulatory expertise to bear and maximizing the potential benefit of this possible new treatment option for patients."

Bahija Jallal, Executive Vice President, MedImmune, said, "This agreement demonstrates our sharp focus on three main therapy areas while creating value from the increased R&D productivity and innovative science in our pipeline through collaborations. Allergan has significant experience in gastrointestinal and inflammatory diseases and is the right partner to progress the development and commercialisation of MEDI2070."

"Although much progress has been made in the last 15 years in treating immune-mediated diseases such as Crohn's disease and ulcerative colitis, there continues to be a large need to provide safe and effective therapies for those patients who fail to have a durable response to existing agents," said Bruce E. Sands, M.D., chief of the Dr. Henry D. Janowitz Division of Gastroenterology at the Mount Sinai Health System, Dr. Burrill B. Crohn Professor of Medicine at the Icahn School of Medicine at Mount Sinai and principal investigator of the phase IIa and phase IIb studies of MEDI2070. "Evidence suggests that interleukin-23 is a key cytokine in the immune processes that drive inflammatory bowel diseases. Based upon early clinical trial data, MEDI2070 may be an effective treatment for patients with Crohn's disease."

MEDI2070 adds to Allergan's strong position in gastroenterology, with marketed therapies to treat Irritable Bowel Syndrome-C (IBS-C), and Chronic Idiopathic Constipation (CIC), Irritable Bowel Syndrome-D (IBS-D) and Ulcerative Colitis. The acquisition also adds to Allergan's commitment to developing the next generation of autoimmune disorder treatments, including its recently announced acquisition of Vitae Pharmaceuticals and its VTP-43742, a phase 2 first-in-class, orally active ROR?t (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis and other autoimmune disorders.

The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Crohn's disease and ulcerative colitis are chronic inflammatory conditions of the gastrointestinal tract. Crohn's disease most commonly affects the end of the small bowel (the ileum) and the colon (also called the large intestine), but it may affect any part of the gastrointestinal (GI) tract, from the mouth to the anus. Ulcerative colitis is limited to the colon. It is estimated that 1.6 million Americans and 2.2 million Europeans suffer from Crohn's disease or ulcerative colitis. The majority of patients are diagnosed in young adulthood and these incidence rates continue to rise, which will continue to place a significant burden on global healthcare systems.