Just Days after a $14 Billion Medivation Buy, Pfizer Buys AstraZeneca PLC's Antibiotics Business for $1.5 Billion-Plus

Just Days after a $14 Billion Medivation Buy, Pfizer Buys AstraZeneca’s Antibiotics Business for $1.5 Billion-Plus August 24, 2016
By Mark Terry, BioSpace.com Breaking News Staff

Although the question of whether Pfizer plans to split into two companies still remains up in the air, what its acquisition plans are after its attempt to acquire Dublin-based Allergan is becoming clearer. Only days after announcing it was acquiring Medivation for $14 billion, Pfizer announced it was buying part of AstraZeneca ’s antibiotics business.

Pfizer is buying the rights to commercialize and develop AstraZeneca’s late-stage small molecule antibiotics business in most global markets outside the U.S. That includes already approved antibiotics Merrem, Zinforo and Zavicefta, and two that are in clinical development, ATM-AVI and CXL.

Allergan controls the North American rights to four of the drugs. Pfizer is acquiring the North American rights to Merem.

Pfizer is paying AstraZeneca $550 million when the deal closes, and another $175 million in January 2019. Also, Pfizer may pay up to $250 million in various commercial, manufacturing and regulatory milestones, as well as up to $600 million in sales-related payments, in addition to recurring, double-digit royalties on any future sales of Zaficefta and ATM-AVI in specific markets.

“As we continue to reshape our Essential Health portfolio, we are focusing on areas that further address global public health needs and that complement our core capabilities and experience in therapeutic areas, including anti-infectives,” said John Young, group president for Pfizer Essential Health, in a statement. “We are committed to looking for ways to enhance our portfolio around the world where we offer patients and healthcare professionals access to more than 60 anti-infective and anti-fungal medicines. The addition of AstraZeneca’s complementary small molecule anti-infectives portfolio will help expand patient access to these important medicines and enhance our global expertise and offerings in this increasingly important area of therapeutics, in addition to providing the opportunity for near-term revenue growth.”

On AstraZeneca’s part, this is a way to strengthen its declining revenue by unloading products that are peripheral to its central business. In June, AstraZeneca sold its anesthetics drugs to Aspen Pharmacare Holdings Ltd. One of its core businesses is oncology. Others include cardiovascular and metabolic diseases, and respiratory, inflammation and autoimmunity.

“This agreement reinforces our strategic focus to invest in our three main therapy areas where we can make the greatest difference to patients’ lives,” said Luke Miels, AstraZeneca’s executive vice president for Europe and head of the Antibiotics Business Unit, in a statement. “We’re pleased that our strong science in antibiotics will continue to serve a critical public health need through Pfizer’s dedicated focus on infectious diseases, ensuring these important medicines reach greater numbers of patients around the world.”

The deal does not include AstraZeneca’s biological anti-infective drugs portfolio, or last year’s spinout of early-stage antibiotic development, Entasis Therapeutics.

AstraZeneca indicates that the deal will be reported under operating income, largely because it isn’t holding onto any significant long-term stake in the business. It also says the deal will not change its 2016 financial guidance.

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