AstraZeneca (LON:AZN) has completed the sale of the rights to its schizophrenia and bipolar disorder treatment Seroquel in some regions, the Anglo-Swedish pharmco has said. The deal with Luye Pharma, announced earlier this year, is part of the FTSE 100 drugmaker’s strategy to focus on a limited number of therapy areas which are expected to drive growth as the company continues to face pressure from cheaper generics on some of its top-selling treatments.
AstraZeneca’s share price has slipped into the red in today’s trading, having given up 0.52 percent to 5,212.00p as of 14:36 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.23 percent lower at 7,603.96 points.
AstraZeneca wraps up Seroquel deal
AstraZeneca announced in a statement today that it had completed its agreement with Luye Pharma for the sale and licence of the rights to Seroquel and Seroquel XR in the UK, China and other international markets. Under the terms of the deal, the Anglo-Swedish drugmaker received a payment of $260 million, with further payments of $240 million and $38 million due in December 2019 and July 2020, respectively, taking the total consideration for the deal to $538 million. The company, however, noted that a milestone payment is also due on the successful transition of certain activities to Luye Pharma.
Earlier this week, analysts at UBS flagged concerns over AstraZeneca’s externalisation revenue, arguing that “consensus underestimates the future profits that are forgone when Astra trades them for up-front payments”.
Analysts on Anglo-Swedish pharmco
Citigroup reaffirmed AstraZeneca as a ‘buy’ today, without specifying a valuation on the shares. According to MarketBeat, the blue-chip pharmco currently has a consensus ‘buy’ rating and an average price target of 5,429.64p.
The FTSE 100 drugmaker is scheduled to update investors on its second-quarter and half-year performance on July 26.