AstraZeneca share price: Pharmco sells antibiotics business to Pfizer

AstraZeneca share price: Pharmco sells antibiotics business to Pfizer

AstraZeneca (LON:AZN) has agreed to sell its small molecule antibiotics business to former suitor Pfizer, the London-listed pharmco has said. The FTSE 100 group, which fended off a takeover attempt by the US pharma giant about two years ago, has been trimming non-core assets, having bet on a limited number of platforms to drive revenue growth.

AstraZeneca’s share price has lost ground in London this morning, having shed 0.63 percent to 5,030.00p as of 09:28 BST. The shares are slightly underperforming the broader London market, with the benchmark FTSE 100 index currently 0.26 percent worse off at 6,850.39 points. The group’s shares have gained just under 30 percent over the past year, and are up by more than nine percent in the year-to-date.
AstraZeneca announced in a statement this morning that it had entered into an agreement with Pfizer to sell the commercialisation and development rights to its late-stage small molecule antibiotics business in most markets outside the US.
Under the terms of the deal, the US pharma giant will make an upfront payment of $550 million to the FTSE 100 group upon completion, as well as a further unconditional payment of $175 million in January 2019 for the commercialisation and development rights to the late-stage antibiotics business in all markets where AstraZeneca holds the rights. The Anglo-Swedish drugmaker will also be entitled to up to $250 million in commercial, manufacturing and regulatory milestones, up to $600 million in sales-related payments as well as recurring, double-digit royalties on future sales of approved antibiotics Zavicefta and ATM-AVI in certain markets.
“This agreement reinforces our strategic focus to invest in our three main therapy areas,” Luke Miels, Executive Vice President for Europe and Head of the Antibiotics Business Unit at AstraZeneca, commented in the statement. The Anglo-Swedish pharmco, some of whose flagship drugs are pressured by competition from cheaper generics, has bet on three platforms, namely oncology, respiratory and autoimmunity, and cardiovascular and metabolic diseases, to propel revenue growth.
As of 09:54 BST, Wednesday, 24 August, AstraZeneca plc share price is 5,030.50p.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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