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Astrazeneca paying $875M up front for Almirall’s respiratory business

By Cormac Sheridan, Staff Writer

DUBLIN – Shares in Almirall SA were up more than 7 percent by mid-afternoon local time, on news that Astrazeneca plc is paying $875 million up front to acquire its respiratory disease portfolio of partnered and pipeline assets. A further $1.22 billion in development, launch and performance-based milestones are attached to the deal.

The transaction gives London-based Astrazeneca a much needed growth impetus to its already sizeable respiratory disease business. The big pharma firm has big ambitions in that area, having identified it as one of five key growth areas during its recent successful defense of a hostile takeover bid from New York-based Pfizer Inc. CEO Pascal Soriot has set himself the task of growing Astrazeneca’s respiratory disease franchise to an $8 billion business by 2023.

The business delivered $4.35 billion in revenues in 2013, mainly through its maintenance therapy for asthma and chronic obstructive pulmonary disease (COPD) Symbicort (budesonide and formoterol), a combination of a glucocorticoid and a long-acting beta2-agonist (LABA), sales of which reached about $3.5 billion.

With Almirall, it is buying potential rather than revenues, but it is also moving into areas with entrenched competition, in the shape of Boehringer Ingelheim GmbH, of Ingelheim, Germany, London-based Glaxosmithkline plc and Basel, Switzerland-based Novartis AG.

The deal gives Astrazeneca Almirall’s top-selling drug, Eklira (aclidinium bromide), a twice-daily long-acting muscarinic antagonist (LAMA), which is approved as maintenance therapy in COPD. It is delivered using a proprietary inhaler, sold as Genuair.

Almirall’s sales of the product grew by 50 percent during the first half of this year to €58 million (US$77.6 million). Rights to Eklira are currently split three ways, however, and there is no indication that Astrazeneca will be in a position to consolidate them. Menarini Group, of Florence, Italy, holds rights in a number of European markets, while Forest Laboratories, now part of Dublin-based Actavis plc, holds rights to the U.S., where it sells the product as Tudorza Pressair. (It reported $25.3 million in sales for the product during the first quarter of this year, the fourth quarter of its fiscal year.)

Notwithstanding the rapid growth rate, the sales total is miniscule when set against that of a rival, once-daily LAMA, Boehringer Ingelheim’s Spiriva (tiotropium bromide inhalation powder), which attained sales of €3.5 billion in 2013.  

However, Astrazeneca still has a shot at an emerging segment of the COPD market, comprising LABA/LAMA combination products. Almirall’s candidate, dubbed LAS40464, is under regulatory review in Europe following two successful phase III trials. A decision from the EMA’s Committee on Human Medicinal Products is expected during the third quarter. The product candidate has hit a setback in the U.S., as the FDA has sought an additional trial.

Already approved in that segment are Anoro Ellipta (vilanterol/umeclidinium bromide), from GSK and Theravance Inc., of South San Francisco, and Ultibro Breezhaler (indacaterol/glycopyrronium), from Novartis. The market is immature as yet, however, and the latter product has not yet obtained FDA approval.

The transaction removes one of Almirall’s two key pillars – respiratory disease and dermatology both account for about 30 percent of sales at present – but it transforms the company’s balance sheet. It reported €88.5 million in cash at the end of the second quarter, but it owed €319.5 million in debt. Almirall’s revenues reached €825 million in 2013, which included about €693 million in product sales.