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Update on AZ-Merck deal

AZ will buy rights to several of Merck's marketed and pipeline products at a cost of $674m, as announced in an update regarding their joint venture

AstraZeneca (AZ) has announced that it will exercise one of its options under the provisions of the agreements relating to the restructuring of its joint venture with Merck in the US at a cost of $674m.

AZ will purchase rights to several Merck products, including the Crohn's Disease treatment Entocort, and blood pressure dugs Atacand, Lexxel and Plendil. Some pipeline drugs are also part of the deal, including the blood thinner Brilinta.

AZ and Merck have been partners on these and other drugs for years. The original sales-and-distribution deal dates to 1982, with a restructuring in 1998.

The deal also includes shares of the heartburn drugs Nexium and Prilosec, which AZ has the option to repurchase beginning in 2012.

By exercising this option under the agreement, a second option to repurchase Merck's interests in heartburn drugs Prilosec and Nexium in the US, is now exercisable by AZ in 2012, or in 2017, or if combined annual sales of the two products fall below a minimum amount.