Shares in AstraZeneca (LON:AZN) have climbed higher in London this morning, as the blue-chip pharmco inked a deal to offload the US rights to its drug Synagis, for an upfront fee of $1.5 billion. The move marks part of the blue-chip pharmco’s strategy, with the company looking to divest non-core drugs and focus on a limited number of therapy areas expected to propel growth.
As of 09:59 GMT, AstraZeneca’s share price had added 0.22 percent to 6,265.00p. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.25 percent higher at 7,070.94 points.
Pharmco continues with divestments
AstraZeneca announced in a statement this morning that it had agreed to sell the US rights to palivizumab, marketed as Synagis, caused by respiratory syncytial virus (RSV) to Swedish Orphan Biovitrum AB (Sobi). Under the terms of the deal, the FTSE 100 drugmaker will receive an upfront consideration of $1.5 billion, consisting of $1 billion in cash and $500 million in ordinary shares of Sobi upon completion, equating to an eight-percent interest in the Swedish group.
AstraZeneca will also receive up to $470 million in sales-related payments for Synagis, a $175-million milestone following the submission of the Biologics License Application for potential new treatment MEDI8897, potential net payments of approximately $110 million on achievement of other MEDI8897 profit and development-related milestones, as well as a total of $60 million in non-contingent payments for MEDI8897 during 2019-2021.
“We continue to streamline our portfolio, allowing AstraZeneca to allocate resources more effectively,” AstraZeneca’s chief executive Pascal Soriot commented in the statement.
Analyst ratings update
HSBC, which sees AstraZeneca as a ‘sell,’ set a price target of 4,860p on the shares yesterday. According to MarketBeat, the blue-chip pharmco currently boasts a consensus ‘buy’ rating and an average price target of 5,882p.
The FTSE 100 company posted upbeat trial results for its diabetes treatment Farxiga yesterday, and revealed that the US Food and Drug Administration had granted priority review to its oncology treatment Lynparza.