AstraZeneca has unloaded a drug line as it works to tighten its focus on a few key areas.
The company entered into an agreement with Pfizer Inc. to sell the commercialization and development rights to its late-stage small molecule antibiotics business in most markets outside the US.
The total price tag of the deal could end up near $1.6 billion.
The portfolio js made up of the approved antibiotics Merrem, Zinforo and Zavicefta, and ATM-AVI and CXL, which is in clinical development.
Under the terms of the agreement, Pfizer will make an upfront payment to AstraZeneca of $550 million upon completion and a further unconditional payment of $175 million in January 2019 for the commercialization and development rights to the late-stage antibiotics business in all markets where AstraZeneca holds the rights.
In addition, Pfizer will pay up to $250 million in commercial, manufacturing and regulatory milestones, up to $600 million in sales-related payments as well as recurring, double-digit royalties on future sales of Zavicefta and ATM-AVI in certain markets.
Luke Miels, EVP for Europe and Head of the Antibiotics Business Unit at AstraZeneca, said: “This agreement reinforces our strategic focus to invest in our three main therapy areas where we can make the greatest difference to patients’ lives. We’re pleased that our strong science in antibiotics will continue to serve a critical public health need through Pfizer’s dedicated focus on infectious diseases, ensuring these important medicines reach greater numbers of patients around the world.”
Astra Zeneca’s MedImmune portfolio of biologics, on-market products such as FluMist/Fluenz and Synagis, and AstraZeneca’s stake in Entasis Therapeutics, spun-off from AstraZeneca in 2015 and now operating as a stand-alone company focused on the development of innovative small-molecule anti-infectives, are not included as part of the agreement.
The deal is interesting, given the fact that Pfizer made a run at an AstraZeneca takeover in a $118 billion deal that would have given the American pharma company overseas tax advantages. AstraZeneca is based in the United Kingdom.
AstraZeneca’s stock price has been rising of late. That could either indicate that investors see it as a takeover target, or that the financial community is seeing progress at the company under CEO Pascal Soriot.
Also, Britain’s new Prime Minister has indicated that the government might defend its drug companies from unwanted takeovers.
The agreement with Pfizer does not impact AstraZeneca’s financial guidance for 2016.
AstraZeneca employs about 2,000 in Delaware. The company is seeing a cost-cutting program that has led to some nervousness in Delaware. However, the company pledged to keep its commercial headquarters in Delaware and is now exploring options for a new site or staying at its current location just outside Wilmington.
