Anglo-Swedish drug maker AstraZeneca Plc (AZN, AZN.L) Monday said it has entered into a definitive agreement to buy US-based respiratory drug maker Pearl Therapeutics for up to $1.15 billion.
As per the terms of the agreement, AstraZeneca will buy the Redwood City, California-headquartered privately held Pearl Therapeutics for an initial consideration of $560 million payable on completion.
Further, a deferred consideration of up to $450 million will be paid if specified development and regulatory milestones are achieved in respect of any triple combination therapies and selected future products that AstraZeneca develops using Pearl's technology.
The terms of the agreement also say that sales-related payments of up to $140 million are made in the event of exceeding cumulative sales thresholds as agreed earlier. The proposed transaction is subject to customary regulatory approvals and is expected to close in the third quarter of 2013.
Pearl Therapeutics develops inhaled combination therapies for treatment of respiratory diseases, including chronic obstructive pulmonary disease, or COPD, and asthma. AstraZeneca said the acquisition will give it access to a potential new treatment for COPD, currently in late-stage development.
According to AstraZeneca, Pearl's lead product, PT003, is a fixed dose combination of formoterol fumarate, a long-acting beta-2-agonist, or LABA and glycopyrrolate, a long-acting muscarinic antagonist or LAMA. The company has initiated a Phase III programme and will test improvement in lung function in individuals with moderate to severe COPD in response to PT003.
Pearl's novel co-suspension formulation technology platform is expected to help AstraZeneca to explore combinations of existing and novel technologies, including a triple fixed dose combination consisting LABA/LAMA and inhaled corticosteroid.
LABA/LAMA combinations are expected to become an important new class of treatment for COPD, the company noted.
Pascal Soriot, chief executive officer of AstraZeneca said, "Chronic obstructive pulmonary disease continues to increase worldwide and there is a growing need for the next generation of inhaled combination products. Pearl's novel formulation technology, together with its development products and specialist expertise are a great complement to AstraZeneca's long-established capabilities in respiratory disease, one of our core therapy areas."
AstraZeneca said the acquisition will have no impact on its financial guidance for 2013.
In London, AstraZeneca shares are currently trading at 3,303.5 pence, up 0.06 percent. On the NYSE, AZN ended on Friday at $51.45.
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