AZ divests over $1bn worth of assets in one week

By Maggie Lynch & Ben Hargreaves

- Last updated on GMT

(Image: Getty/lalocraico)
(Image: Getty/lalocraico)

Related tags: Divest, Sales, Astrazeneca, Manufacturing

AstraZeneca sold two drugs to Grünenthal for $700m and, a week later, divested a further three drugs to Covis for $350m.

The most recent divestment sees AstraZeneca (AZ) enter an agreement with Covis Pharma to sell the rights to Alvesco (ciclesonide), used for the treatment of persistent asthma, as well as Omnaris and Zetonna (ciclesonide), used for the treatment of nasal symptoms associated with rhinitis.

Covis, headquartered in Switzerland, will pay $350m (€306m) to become the owner of the medicines, after previously holding the rights to commercialise the three treatments in the US. In addition, AZ could receive a further $21m over four years depending on sales.

Divestment strategy

Only a week prior AZ had announced that it would divest two medicines to Grünenthal for $815m.

Grünenthal, a science-based pharmaceutical company specializing in pain management and related therapies, will pay $700m (€613m) for Nexium (esomeprazole), and $115m (€100.9m) for Vimovo (naproxen/esomeprazole) upfront. AZ may also receive future milestones and sales-related payments up to $107m from both drugs.

In a statement, Mark Mallon, EVP, global product and portfolio strategy, said: “One of our strategic objectives is to divest parts of our portfolio, allowing us to allocate resources to develop innovative new medicines to address unmet patient needs.”

Nexium has lost compound patent protection in the majority of global markets, while Vimovo is still patent protected in most European markets until 2025. In 2018, Nexium’s European sales were $121m (€106m) and Vimovo’s global sales were $37m (€32.5m).

According to an AZ spokesperson, “The products [Nexium and Vimovo] are legacy assets identified for partnering as part of AstraZeneca’s strategy to realize value from legacy assets outside our three main therapy areas.”

AZ will continue to commercialize Nexium in all markets outside Europe. Per the agreement’s completion, AZ will not retain any ownership rights to Vimovo globally, or Nexium in Europe. AZ will also continue to manufacture and supply Nexium under a long-term supply agreement.

The divestments are expected to be completed by the end of 2018.

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