UK's AstraZeneca is set to buy U.S. lung drug firm Pearl Therapeutics for up to $1.15 billion. The company is hoping to restore its fortunes after a string of late-stage research failures. It has also seen a number of big sellers fall out of patent, and stalwarts Nexium and Crestor are set to lose their crucial U.S. patent protection in 2014 and 2016 respectively.
The deal for U.S.-based Pearl Therapeutics will give Astra a stronger foothold in the market for lung treatments by giving it access to a potential new treatment for chronic obstructive pulmonary disease, which is currently in late-stage development. The takeover is a clear signal that the company’s new Chief Executive Pascal Soriot believes its respiratory business is a core growth area.
AstraZeneca has been suffering falling profits and sales as several of its blockbuster drugs, such as the anti-psychotic Seroquel and anti-cholesterol Crestor, have lost their patent protection, allowing cheaper generic drugs to enter the market.
Some industry analysts believe that LABA/LAMA inhalers are set to dominate future therapy for chronic obstructive pulmonary disease (COPD), which causes debilitating breathlessness and affects an estimated 210 million people worldwide.
Under the terms of the agreement, the British-Swedish pharmaceutical and biologics company will pay $560m up front and a further $450m dependent on specific development and regulatory milestones.
The pharmaceuticals Sales-related payments of up to a further $140m are payable it sales thresholds are met.
"Pearl has extraordinary research and clinical development teams that have successfully completed 10 clinical trials for our lead program," said Chuck Bramlage, chief executive officer for Pearl Therapeutics. "We look forward to combining our skills and the global regulatory and commercial expertise at AstraZeneca to move PT003 and our other candidates towards market where they can reach millions of patients suffering from COPD."
Kevin Ferro, chairman of the Board of Pearl Therapeutics and chief executive of Vatera Healthcare Partners, Pearl's lead investor, said: “We have been impressed with AstraZeneca's expertise, focus and speed of execution and are delighted to be joining the group, a global leader in respiratory disease, as we believe that Pearl will be an excellent fit for its respiratory portfolio.”
Pearl's lead product, PT003, is a fixed dose combination of formoterol fumarate, a long-acting beta-2-agonist (LABA) and glycopyrrolate, a long-acting muscarinic antagonist (LAMA). It is in final-stage Phase III clinical trials.
The deal, which is expected to close in the third quarter of 2013, will have no impact on AstraZeneca’s financial guidance for the year, the company said.
The company is simplifying its drug development programme, cutting 5,000 jobs by 2016, and is looking to expand through acquisitions instead.