AstraZeneca struck a deal with private British biotech firm Immunocore to develop a drug that will fight cancer by harnessing the body's immune system, Reuters reported. Rival firms like Bristol-Myers Squibb, Roche and Merck & Co has led the field for such drugs. Analysts believe that these immunotherapies significantly extend the lives of patients and enable companies to gather annual sales amounting to tens of billions of dollars, the report said.

However, AstraZeneca's long history of providing cancer treatment as well as its large portfolio of experimental drugs which range from traditional pills to injectable biotech products, places it on a strong position to come up with combination therapies, the report said.

Reuters reported that these drug "cocktails" are considered to be vital in the fight of oncologists to treat fight cancer on various fronts. Chief Executive Officer Pascal Soriot is looking at oncology as he looks to re-establish AstraZeneca's pipeline of new therapies that have slowly become depleted, the report said.

The Immunocore deal will add the Immune Mobilising Monoclonal T-Cell Receptor Against Cancer or ImmTAC technology to AstraZeneca's MedImmune unit. MedImmune Head Bahija Jallal said ImmTAC-based drugs have the potential to tap the power of the immune system to hunt and kill diseased cells, making it promising in a wide range of cancers.

Immunocore will receive an upfront payment of $20 million from MedImmune for each program it takes on. The biotech firm will then be eligible to receive as much as $300 million in development and commercial milestone payments for each target program in addition to the royalties on later sales, the report said.

The transaction further justifies the technology developed by Immunocore, which already has inked research and licensing deals with Roche and GlaxoSmithKline. For AstraZeneca, on the other hand, the new agreement is the newest in its string of partnerships with biotechnology firms working in the cancer field.