Smaller drug developers like Cubist Pharmaceuticals
In return for getting the rights to market Cubicin in China and certain other Asian countries, as well as places like the Middle East and Africa, Cubist will receive an undisclosed royalty on all sales of the drug. The agreement also gives Cubist $10 million up front and provides for milestone payments upon Cubicin's reaching certain regulatory and sales milestones in various countries.
The best part of the deal is that Cubist retains the rights to Cubicin in Japan, which is by far the biggest market in all of Asia, accounting for almost two-thirds of the approximately $100 billion Asian market for pharmaceuticals. I'd expect an agreement with Pfizer
When partnering a drug, it's not only the terms of the partnership that are important, but also the quality and clout of the partner. Cubist made a smart decision in choosing AstraZeneca, because it is well represented in Asia and as of 2004 was the ninth largest pharmaceutical company in this rapidly growing market.
Cubicin sales have been growing like crazy in the past year, and opening up sales in these new markets will only hasten the drug's sales trajectory. Cubist is smart to get the long process of bringing Cubicin to market in the individual Asian countries underway sooner rather than later, as the Asia Pacific region accounts for roughly 17% of worldwide pharmaceutical sales. Getting an experienced pharma partner like AstraZeneca to help with the process and provide a generous up-front payment makes this move even better.