AstraZeneca PLC continues to trim the fat with the recent sale of some of its antibiotic business to Pfizer, Inc. As such, Pfizer could acquire as much as $1.75 billion in addition to royalties in a move that the company says will help to boost the sales of its host of older products—some of which are now without their patent protections.
In this deal, Pfizer will pay AZ $550 million up front, as well as $175 million, in January of 2019. More money will change hands, thus, but only after determining the future progress of those commercial drugs discussed, which would result in an additional $850 million, plus royalties.
What are the drugs in question?
The deal includes three approved antibiotics and two drugs that are still in clinical trials. The deal, basically, will hand over the rights to sell these drugs in most markets outside of the United States and Canada. Currently, Allergen PLC holds the North American rights to four of the five drugs; Pfizer will get the Norther American rights for the fifth, a drug called Merem.
Pfizer comments that they will greatly benefit from this in terms of adding quality products to its “essential health” business. This is a branch which sells older products like these, including those products that might have lost patent protection. So far, the US-based company already has an impressive portfolio of more than 60 anti-fungal and anti-infective medicines, according to unit head John Young.
And Pfizer executive Vice President Europe and head of antibiotics, Luke Miels, comments that the deal will help these drugs “reach greater numbers of patients around the world.”
The reason for this, though, is that, essentially, the pharmaceutical industry has begun to turn away from antibiotic research. Apparently, it is not a high return on investment—with antibiotic resistance on the rise, for one. As such, global governments continue to look for new methods for encouraging larger companies—such as these—to return to the research space and help address the global concern over antibiotic resistance.
And that requires research.
Young goes on to say, “The addition of AstraZeneca’s complementary small molecule anti-infective portfolio will enhance our global expertise and offerings in this increasingly important area of therapeutics, in addition to providing the opportunity for near-term revenue growth.”