Shares in AstraZeneca (LON:AZN) have advanced in today’s session with investors cheering the group’s deal to offload some rights to its heartburn treatment Nexium and arthritis drug Vimovo, for what could be nearly $1 billion. The sale underscores the pharmco’s efforts to focus on its three main therapy areas of Oncology, Cardiovascular, Renal & Metabolism and Respiratory to propel growth.
As of 14:28 GMT, AstraZeneca’s share price had added 0.82 percent to 5,912.00p, outperforming the blue-chip FTSE 100 index which has slipped marginally into the red and currently stands 0.22 percent lower at 7,010.80 points. The group’s shares have added nearly 18 percent to their value over the past year, as compared with about a 6.6-percent dip in the Footsie.
Nexium and Vimovo rights sale
AstraZeneca announced in a statement today that it had agreed to divest the prescription medicine rights to Nexium in Europe, as well as the global rights to Vimovo, excluding the US and Japan, to Grünenthal. The blue-chip group explained that the medicines are outside its main therapy areas.
“The divestment agreements allow us to realise value from our successful medicines while redeploying our resources on developing innovative medicines for patients across our three main therapy areas, which we expect to drive growth for AstraZeneca,” Mark Mallon, Executive Vice President, Global Product & Portfolio Strategy, commented in the statement.
Under the terms of the agreement, Grünenthal will make an upfront payment of $700 million for Nexium upon completion of the deal which is expected later this year. AstraZeneca may also receive future milestones and sales-related payments of up to $90 million. For Vimovo, Grünenthal will make an upfront payment of $115 million on completion, with future milestones and sales-related payments potentially reaching $17 million.
Analysts on FTSE 100 drugmaker
Shore Capital reaffirmed AstraZeneca as a ‘hold’ today, while yesterday, Credit Suisse reiterated its ‘outperform’ stance on the company yesterday. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 5,777.58p.