Astra raises guidance after Pfizer OTC tie-up
Anglo-Swedish drugs colossus AstraZeneca has raised earnings guidance a tad after signing a deal with US pharmaceuticals titan Pfizer.
Anglo-Swedish drugs colossus AstraZeneca has raised earnings guidance a tad after signing a deal with US pharmaceuticals titan Pfizer.
Astra's core earnings per share (EPS) target for 2012 has been increased to the range of $6.00 to $6.30 after the group revealed that Pfizer is to stump up for the exclusive global rights to market NEXIUM for the approved over-the-counter (OTC) indications in the United States, Europe and the rest of the world.
Under the agreement, Pfizer will make an upfront payment of $250m to AstraZeneca and AstraZeneca is eligible to receive milestone and royalty payments based on product launches and sales. The upfront element of the consideration should boost Astra's EPS by around 16 cents this year.
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What may be of more significance to shareholders is the news that both companies are exploring the potential for a strategic partnership that would include similar agreements for other AstraZeneca prescription brands for which an OTC version might be appropriate. The companies have signed a right of first refusal regarding OTC rights for Rhinocort Aqua, a pump spray containing the glucocorticosteroid budesonide, with a local anti-inflammatory effect for the treatment of non-infectious rhinitis (such as hay fever and house dust mite allergy).
"We're pleased to work with Pfizer Consumer Healthcare and believe their expertise in the sales and marketing of consumer health products makes them the optimal partner to commercialise OTC NEXIUM globally. This agreement will help AstraZeneca realise the substantial, long-term value of this brand and potentially other brands in our portfolio," claimed Tony Zook, Executive Vice President of AstraZeneca's Global Commercial Organisation.
NEXIUM, a heartburn relief for acid reflux, was launched by AstraZeneca in Europe in 2000 and the US in 2001. AstraZeneca will continue to manufacture and market the prescription product, as well as supply Pfizer with the OTC product.
A Marketing Authorisation Application for OTC NEXIUM in a 20 milligram (mg) tablet form was filed with the European Medicines Agency in June 2012. A New Drug Application filing for OTC NEXIUM in the US in 20 mg capsules is targeted for the first half of 2013 and if approved Pfizer anticipates commercialising this product in the US beginning in 2014 with launches in other markets to follow.
JH
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