AstraZeneca's latest sale rakes in $555M
- British drugmaker AstraZeneca plc said it will sell off another piece of the business in an ongoing effort to narrow its therapeutic focus and bring in needed cash to buffer declining sales elsewhere.
- The latest non-core asset sale, announced Thursday morning, rids the British pharma of the remaining rights related to a portfolio of anaesthetic medicines, including Diprivan, Naropin, Carbocaine and several others.
- Aspen Global Inc. will pay $555 million upfront for the remaining intellectual property and manufacturing know-how related to the portfolio, as well as $211 million in performance-based milestones based on sales from September 2017 to November 2019.
In June 2016, AstraZeneca divested ex-U.S. rights to this portfolio of products to Aspen for $520 million upfront plus another $250 million in sales milestones. Now the generic drugmaker is picking up the remainder.
Aspen will still pay the remaining milestone payments from the first part of the deal, but no longer will be responsible for making royalty payments to AstraZeneca. The big pharma will handle manufacturing of the products until the deal closes in the fourth quarter and then will transition manufacturing to Aspen.
"Disposing the remaining rights to the medicines allows both companies to benefit from greater efficiencies as AstraZeneca continues to focus our resources on our three main therapy areas," said Mark Mallon, EVP of global product and portfolio strategy at AstraZeneca.
The deal is just the latest in a string of sales the British pharma has been conducting over the last two years.
With the MYSTIC trial failure in the rearview, it’s becoming clear that hitting CEO Pascal Soriot’s goal of $45 billion in revenues by 2023 is likely out of reach. 2016 revenues came in at about half that figure and have been declining since 2014. While Soriot has pegged 2017 as a turnaround year, AstraZeneca will have trouble growing fast enough to make up the difference.
As the company aims to focus on its three core franchises — oncology, respiratory and inflammation, and cardio-metabolic disorders — it has been selling many unrelated assets in an effort to boost revenues and reallocate resources to the more promising programs.
AstraZeneca isn’t the only big pharma with this idea, although the British drugmaker may be the most active. A good number of its big pharma brethren have also been working to restructure broad portfolios and focus in on select core therapeutic areas. While the strategy was once to have a finger in every pie, big pharma is changing its ways.
- AstraZeneca Press release
- BioPharma Dive AstraZeneca: Everything must go!
- BioPharma Dive AstraZeneca continues deal spree, sells off latest asset
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