As­traZeneca makes $1B-plus in cash-and-stock deal grant­i­ng So­bi US rights to RSV drug Synagis

As­traZeneca $AZN has di­vest­ed the US rights to its pre­ven­ta­tive RSV drug, Synagis, to Swedish Or­phan Biovit­rum AB (So­bi) for $1.5 bil­lion in cash and stock, as the British drug­mak­er con­tin­ues to re­fine its pipeline and fo­cus on its new­er flag­ship prod­ucts.

Synagis, known chem­i­cal­ly as palivizum­ab, is used to pre­vent se­ri­ous low­er res­pi­ra­to­ry tract in­fec­tions caused by the res­pi­ra­to­ry syn­cy­tial virus (RSV) in in­fants and young chil­dren, and is the on­ly med­i­cine ap­proved for the pre­ven­tion of se­ri­ous RSV dis­ease. US sales of the drug de­clined by 27% to $133 mil­lion in Q3, As­traZeneca re­port­ed last week. Sales of the drug out­side the US, which is the re­spon­si­bil­i­ty of Ab­b­Vie $AB­BV, were up 4% to $281 mil­lion.

Pas­cal So­ri­ot

De­spite some pipeline set­backs, As­traZeneca has en­joyed some some land­mark suc­cess­es in on­col­o­gy un­der chief Pas­cal So­ri­ot, fol­low­ing years of shrink­ing rev­enue and grow­ing gener­ic com­pe­ti­tion eat­ing in­to sales of the com­pa­ny’s main­stay prod­ucts. So­ri­ot’s ap­proach, char­ac­terised by new drug ap­provals and as­set sales, is fo­cused on the prin­ci­ple that the com­pa­ny must sim­pli­fy its ap­proach, con­cen­trat­ing on block­buster, stan­dard-of-care as­sets that can make a ma­jor dif­fer­ence. This strat­e­gy has changed the com­pa­ny’s tra­jec­to­ry — last week As­traZeneca re­port­ed a sig­nif­i­cant spurt in Q3 sales, dri­ven by new prod­uct de­vel­op­ment and suc­cess in the grow­ing Chi­na drug mar­ket.

As part of the trans­ac­tion, So­bi will com­mer­cial­ize Synagis in the US and rough­ly 130 As­traZeneca em­ploy­ees will be trans­ferred to the Swedish drug­mak­er. So­bi will al­so have the right to par­tic­i­pate in As­traZeneca’s share of US prof­its and loss­es re­lat­ed to po­ten­tial new med­i­cine ME­DI8897, a mon­o­clon­al an­ti­body that neu­tral­izes RSV and has been en­gi­neered to have a long half-life, so that on­ly one dose will be need­ed for the en­tire RSV sea­son.

As­traZeneca will con­tin­ue to de­vel­op ME­DI8897 in col­lab­o­ra­tion with France’s Sanofi $SNY, the British drug­mak­er added on Tues­day.

The deal con­sists of $1 bil­lion in cash and $500 mil­lion in or­di­nary So­bi shares up­on com­ple­tion, which rough­ly trans­lates to an 8% stake in the Swedish com­pa­ny, based on So­bi’s cur­rent share price. As­traZeneca will al­so re­ceive up to $470 mil­lion in sales-re­lat­ed pay­ments for Synagis, and So­bi is el­i­gi­ble to get a $175 mil­lion mile­stone fol­low­ing the sub­mis­sion of the BLA for ME­DI8897 among oth­er po­ten­tial mile­stone pay­ments.

The So­bi agree­ment fol­lows a spate of such deals by As­traZeneca, in­clud­ing the sale of three as­sets to Switzer­land’s Co­vis Phar­ma last week, and the di­vesti­ture of cer­tain rights to two as­sets — Nex­i­um and Vi­mo­vo — to Ger­many’s Grü­nen­thal late last month.


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