AZ Acquires Almirall's Respiratory Franchise For Up To $2.1B

British drugmaker AstraZeneca declared that it has acquired Spanish company Almirall’s lung drugs and products business for up to $2.1 billion. As part of the agreement, AZ will pay an upfront fee of $875 million to gain rights to Almirall’s proprietary respiratory franchise and up to $1.22 billion in milestones in development, marketing, and sales. The big pharma firm also agreed to make other sales-related payments upon hitting targets.

AZ already has a substantial respiratory drug portfolio, which includes $3.5 billion-a-year Symbicort as well as Pulmicort. However, it still faces steep competition from rivals like GlaxoSmithKline. This transaction hands over Almirall’s lung drugs Eklira (aclidinium), LAS40464, LAS100977 (abediterol), a MABA platform in preclinical development, and LAS190792, currently in a Phase I trial for development and marketing. The device Genuair, which contains both aclidinium and aclidinium combined with formoterol, is also included in the list of acquired respiratory assets, bolstering AZ’s offerings on the market.

Pascal Soriot, CEO of AstraZeneca, said that the agreement with Almirall will benefit the company in terms of long-term value as well as immediate revenues. “Chronic respiratory disease affects hundreds of millions of people around the world. By combining our innovative portfolios and leveraging AstraZeneca’s global scientific and commercial capabilities, we will strengthen our ability to address the entire spectrum of care in asthma and COPD. I very much look forward to welcoming the Almirall people to our company.”

Jorge Gallardo, President of Almirall, said that the agreement permits Almirall to balance the risks and costs of its respiratory franchise while developing its assets with AstraZeneca. “All this constitutes a very solid baseline to move more aggressively in specialty areas and particularly towards becoming a global dermatology player. R&D will remain a key part of Almirall’s business going forward and hopefully a significant long-term growth driver.” Some analysts speculate that the move will help Almirall focus and specialize on dermatology, currently its second largest franchise next to its respiratory business.

Astra said it anticipates the transaction to close by the end of 2014 and consequently have no effect on its current financial outlook for the year.