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AZ cuts $1.5bn-plus deal to pass US drug rights to Sobi

AZ continues sell-off, SOBI spies US expansion

AstraZeneca’s sell-off of non-core products continues, with Swedish Orphan Biovitrum (Sobi) paying a hefty $1.5bn upfront to claim commercial rights to its respiratory syncytial virus (RSV) drugs.

The deal covers US rights to AZ’s already-marketed antibody Synagis (palivizumab), which is the only approved prophylaxis against the virus – as well as profit sharing for follow-up candidate MEDI8897 – already partnered with Sanofi – which is currently in mid-stage development.

Synagis made $677m last year but thanks to generic competition in some markets is in decline, having crossed the $1bn sales threshold at its peak, and slipped another 9% to $414m in the first nine months of the year.

The licensing deal includes $1bn in cash, with AZ taking an 8% equity stake in Sobi for $500m, and will also see around 130 of AZ’s workers transferred to the Swedish company. There’s also provision for up to $470m in sales milestones ties to Synagis, plus a $175m payment due on the US filing for MEDI8897 and another $170m ties to sales and other considerations for that drug.

RSV infections represent a substantial burden and is estimated that around one in five infants under the age of six months require medical attention for RSV annually.

AZ is starting to see the benefits of the divestment strategy adopted by chief executive Pascal Soriot after fending off a takeover attempt by Pfizer four years ago. it has jettisoned dozens of older drugs and reinvested the profits into R&D. Last week, the company reported its first quarter of sustainable sales growth since 2014, with Soriot predicting “several years of sustained growth” after putting patent expiries on a slew of former blockbusters in the rear view mirror.

The Synagis and MEDI8897 deals continues AZ’s policy of focusing firmly on a few therapeutic areas and according to Soriot will allow AZ “to allocate resources more effectively, while Sobi’s focus on Synagis will enable infants in the US to continue benefiting from this important treatment.”

The prospects for both of AZ’s drugs for RSV prevention took an upturn last year, when a potential rival – Regeneron’s suptavumab – was dropped from development after missing its targets in a phase 3 trial.

Meanwhile, new candidates for treating established RSV infections are also coming through the pipeline, with Sanofi’s Ablynx unit expecting phase 2b results for ALX-0171 before the end of the year. Johnson & Johnson has however just abandoned clinical development of lumicitabine for RSV treatment, citing the need for “additional preclinical data”.

A vaccine candidate – Novavax' RSV-F – missed the mark in a phase 3 trial in 2016 but remains in late-stage development for infants with RSV via maternal immunisation, with results due in the first quarter of 2019.

The deal represents a major expansion for Sobi, which is currently focused on rare diseases and haemophilia in Europe (the latter through a licensing deal with Bioverativ), with limited penetration into the US market.

Guido Oelkers

Sobi President and CEO Guido Oelkers commented:

“I am excited about adding Synagis to our portfolio as it remains the only product preventing RSV infection in this vulnerable patient group with a great medical need. The addition of Synagis will become an important strategic catalyst for Sobi’s future development and will form a powerful platform for growth in rare diseases."

Oelkers concluded: "We see the acquisition as a stepping stone to drive sustainable growth in the US and make Sobi more attractive for partnering. It also increases the overall Specialty Care franchise and diversifies our portfolio in Immunology. The expected earnings of this acquisition will increase the financial flexibility to support further growth initiatives.”

Article by
Phil Taylor

13th November 2018

From: Sales

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