AstraZeneca to pay up to $2 billion for Almirall respiratory franchise

AstraZeneca has made a bold move to expand its respiratory franchise by buying up drugs and pipeline candidates from Spanish pharma company Almirall.

AstraZeneca will pay the Barcelona-headquartered pharma company $875 million to buy Eklira, its COPD and asthma treatment, plus a number of other clinical and pre-clinical candidates.

The deal could be worth around $2 billion in total, as AstraZeneca has also agreed to pay up to $1.22 billion in development, launch, and sales-related milestones and payments.

The deal mirrors the deal AstraZeneca did with Bristol-Myers Squibb in February this year to buy it out of their diabetes alliance, a transaction worth upwards of $4 billion.

Such deals, aimed at creating critical mass in core therapy areas stand in contrast to the mega-merger proposed by Pfizer, which AstraZeneca repelled in May. AstraZeneca’s chief executive Pascal Soriot is hoping that these targeted acquisitions will help satisfy investors, some of whom remain unconvinced by AstraZeneca’s go-it-alone strategy, and still hope for a Pfizer buy out.

AstraZeneca has also announced today a separate deal with Japanese firm Kyowa Hakko Kirin to develop oncology combinations, showing the company is sustaining the turbo-charged deal making it began as part of its defence against the Pfizer takeover bid. 

AstraZeneca has a heritage in respiratory medicine, but has not produced any new products in the field for some time. Its existing asthma and COPD franchise is made up of Pulmicort (which earned $867million in 2013) and blockbuster combination treatment Symbicort, which earned $3.4 billion last year. However Symbicort is now facing imminent generic competition in Europe and the US – a decline in earnings that AstraZeneca can scarcely afford, as it struggles to find revenues to replace expiring blockbusters.

As well as Eklira, Almirall also has LAS40464, the combination of aclidinium with formoterol awaiting approval in Europe and undergoing trials in the US.

In the pipeline is LAS100977 (abediterol), a once-daily long-acting beta2-agonist (LABA), currently in phase 2; an M3 antagonist beta2-agonist (MABA) platform in pre-clinical development (LAS191351, LAS194871) and phase 1 (LAS190792); and multiple pre-clinical programmes.

The deal will also see Almirall Sofotec, an Almirall subsidiary which develops new proprietary devices, also transferred to AstraZeneca.

AstraZeneca hope the addition of the Almirall portfolio will boost its offering to patients and doctors, creating a range of drugs and drug combinations delivered via dry powder inhaler and metered dose inhaler devices.

The companies anticipate that, subject to local consultation and legislation, many of the Almirall employees working in the respiratory business, including Almirall Sofotec employees, will transfer to AstraZeneca.

Pascal Soriot, chief executive of AstraZeneca said: “Our agreement with Almirall brings strategic and long-term value to AstraZeneca’s strong respiratory franchise, one of our key growth platforms. We will benefit from immediate and growing product revenues which we anticipate will be rapidly accretive to earnings.”

He said the combination of the portfolios, and AstraZeneca’s ability to apply its scientific and commercial resources to the drugs would pay off.

The company will have a lot of work to do built sales of Eklira – the drug is currently available across 26 countries around the world, but has so far achieved only modest sales – generating just €123.5 million in the first half of 2014.

The combination of Eklira with formoterol was filed in Europe in Q4 2013 and a CHMP opinion is expected in late Q3 2014. However the FDA has proved more demanding, and Almirall has now agreed to undertake a 24 week clinical trial to support the combination’s filing in the US, where it currently collaborates with Actavis.

AstraZeneca’s move is further bad news for its rival in respiratory medicine, GlaxoSmithKline, which has just revealed disappointing results for its new respiratory drugs, Breo and Anoro.

Links

Bristol-Myers Squibb to sell stake in diabetes alliance to AstraZeneca

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