U.K.-based (NASDAQ: AZN) is now gearing up for the second time to develop a challenger to Novo Nordisk's (NYSE: NVO) Ozempic, its absurdly successful treatment for type 2 diabetes. If AstraZeneca's bid succeeds, the company will mint yet another blockbuster drug yielding more than $1 billion in sales per year.

But it may be wise to hold off on making an investment until a few key issues are addressed. Let's go over why this attempt to dethrone Ozempic probably isn't a slam dunk.

On Nov. 9, AstraZeneca signed a licensing agreement with a Chinese biotech called Eccogene. AstraZeneca will gain the development and commercialization rights outside of China for Eccogene's phase 1 clinical asset for treating type 2 diabetes, ECC5004. The deal, sealed with an up-front payment of $185 million and a commitment to pay nearly $2 billion more in potential milestone payments, means that AstraZeneca is now aiming to escalate its participation in the global diabetes market. Management estimates that market is worth more than $125 billion today, so the stakes are significant.

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Source Fool.com