By Hester Plumridge
LONDON-- AstraZeneca PLC has agreed to buy the rights to a
portfolio of inhaled drugs from Almirall SA in a deal worth up to
$2.1 billion, a significant step toward expanding its respiratory
business and the type of pipeline-boosting deal favored by Chief
Executive Pascal Soriot.
The deal will give the U.K. drug maker a type of treatment for
chronic obstructive pulmonary disease which it currently lacks, a
new type of inhaler and a portfolio of pipeline drugs, potentially
helping it compete better with rivals such as respiratory-market
leader GlaxoSmithKline PLC.
AstraZeneca's asthma treatment Symbicort has been gaining market
share in the U.S. from Glaxo's best-selling drug, Advair.
The Almirall deal will also shore up AstraZeneca's revenue,
which is forecast to decline between now and 2017. The company
hopes a raft of new drugs--including a number of promising cancer
treatments--will hit the market by that time.
However, the deal doubles up on a number of pipeline drugs that
AstraZeneca acquired through its 2013 purchase of Pearl
Therapeutics.
"We see a significant overlap with the recently acquired Pearl's
assets, which could raise questions about AstraZeneca's strategy in
respiratory, " Morgan Stanley said in a research note.
AstraZeneca said it would pay the Spanish drug maker an initial
consideration of $875 million and up to a further $1.22 billion in
development, launch and sales-related milestones and payments. That
values the portfolio around 2.6 times revenue, Panmure Gordon said
in a note.
For Almirall, the deal marks a surprising exit from respiratory
drugs, its single largest unit, responsible for just under a third
of total sales.
It removes the risk of delays to U.S. approval of one of
Almirall's combination drugs, Barclays said in a note. Shares in
the Spanish company, which has a market capitalization around $2.5
billion, rose 9% Wednesday. After the transaction, Almirall will be
heavily dependent on its dermatology assets
The key marketed drug being acquired by AstraZeneca in the deal
is Eklira, a long-acting muscarinic agonist--a type of drug that
reverses airway obstruction.
AstraZeneca will also secure the rights to drugs in development
and a subsidiary of Almirall devoted to the development of new
inhaler devices.
Inhaler technologies are crucial to the delivery of respiratory
drugs, allowing drugs to reach the airways in the right condition
and combination.
For AstraZeneca, the deal adds to a string of acquisitions Mr.
Soriot has made recently to bolster the company's revenue and drug
pipeline. Since taking over in late 2012, Mr. Soriot has signed six
such deals worth around $4.2 billion, including assets in oncology,
respiratory and cardiovascular diseases.
In May, AstraZeneca fended off a $120 billion takeover approach
from Pfizer Inc. , saying it undervalued the company. Mr. Soriot is
now considering ways to maximize AstraZeneca's valuation, including
potentially finding a partner to market its cancer drugs, exploring
deals for its noncore neuroscience and anti-infective drugs, and
signing deals to boost its pipeline.
AstraZeneca expects the acquisition, which it plans to finance
through existing cash resources and short-term debt, to boost
earnings starting in 2016.
"Our agreement with Almirall brings strategic and long-term
value to AstraZeneca's strong respiratory franchise, one of our key
growth platforms," Mr. Soriot said.
Shares in AstraZeneca rose around 1% to 4,360 pence in morning
trading Wednesday.
Jana Simmons contributed to this article.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires