AstraZeneca PLC Aspen acquires remaining rights to AZ anaesthetics (6960Q)
September 14 2017 - 2:01AM
UK Regulatory
TIDMAZN
RNS Number : 6960Q
AstraZeneca PLC
14 September 2017
14 September 2017 07:00 BST
ASTRAZENECA AND ASPEN ENTER AGREEMENT FOR
REMAINING RIGHTS TO ANAESTHETIC MEDICINES
Agreement builds on 2016 collaboration on commercialisation
rights to anaesthetic medicines in markets outside the US
AstraZeneca today announced that it has entered into an
agreement with Aspen Global Incorporated (AGI), part of the Aspen
Group, under which AGI will now acquire the residual rights to the
established anaesthetic medicines comprising of Diprivan, EMLA,
Xylocaine/Xylocard/Xyloproct, Marcaine, Naropin, Carbocaine and
Citanest.
AstraZeneca entered into an agreement with AGI in June 2016,
under which AGI gained the exclusive commercialisation rights to
the medicines in markets outside the US. Under the terms of the new
agreement, AGI will now acquire the remaining rights to the
intellectual property and manufacturing know-how related to the
anaesthetic medicines for an upfront consideration of $555 million.
Additionally, AGI will pay AstraZeneca up to $211 million in
performance-related milestones based on sales and gross margin
during the period from 1 September 2017 to 30 November 2019.
AstraZeneca will continue to manufacture and supply the medicines
to AGI during a transition period of up to five years.
Mark Mallon, Executive Vice President, Global Product and
Portfolio Strategy, AstraZeneca said: "AstraZeneca, AGI and
patients have all benefitted from the successful commercial
agreement we established last year. As our relationship has
evolved, AGI has shown that it is in a strong position to maximise
the value and reach of the anaesthetic medicines through its
extensive commercial network. Disposing the remaining rights to the
medicines allows both companies to benefit from greater
efficiencies as AstraZeneca continues to focus our resources on our
three main therapy areas."
Stephen Saad, Group Chief Executive, Aspen, said: "This second
transaction allows AGI to reap the additional benefits from the
excellent strategic acquisition that the anaesthetics portfolio has
proven to be for Aspen and a key part of this will be to continue
leveraging the strong working relationship that AGI has developed
with AstraZeneca."
Financial considerations
Under the terms of the original agreement, entered into in June
2016, AGI made an upfront payment to AstraZeneca of $520 million
and agreed to make future Product Sales-related payments of up to
$250 million (see first payment below), as well as paying
double-digit percentage royalties on Product Sales. AstraZeneca
agreed to continue to manufacture and supply the medicines to AGI
on a cost-plus basis for an initial period of 10 years.
The new agreement does not impact the first Product
Sales-related payment of $150 million due to AstraZeneca, for which
the contingent terms have now been met. This income will be
recorded as Externalisation Revenue in the Company's financial
statements in the third quarter of 2017.
Under the new agreement, AGI will no longer pay royalties to
AstraZeneca. The remaining $100 million Product Sales-related
payment from the original agreement will be made to AstraZeneca in
2018, if the contingent terms are met, and will be recorded as
Other Operating Income to reflect the reduced ongoing interest in
the medicines as a result of the new agreement.
Further, as AstraZeneca will transition the manufacture and
supply of the medicines to AGI, and therefore will have a reduced
ongoing interest, the $555 million upfront and up to $211 million
sales and gross margin-related payments from the new agreement will
also be recorded as Other Operating Income in the Company's
financial statements.
The new, additional agreement is expected to close in the fourth
quarter of 2017, subject to customary closing conditions and
regulatory clearances. It does not impact AstraZeneca's financial
guidance for 2017.
About AstraZeneca
AstraZeneca is a global, science-led biopharmaceutical company
that focuses on the discovery, development and commercialisation of
prescription medicines, primarily for the treatment of diseases in
three main therapy areas - Oncology, Cardiovascular & Metabolic
Diseases and Respiratory. The Company also is selectively active in
the areas of autoimmunity, neuroscience and infection. AstraZeneca
operates in over 100 countries and its innovative medicines are
used by millions of patients worldwide.
For more information, please visit www.astrazeneca.com and
follow us on Twitter @AstraZeneca.
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