AstraZeneca plc (ADR) (NYSE:AZN) disclosed that it reached a deal with ProStrakan Group for the rights to Moventig not only in the European Union but also Liechtenstein, Switzerland, Norway, and Iceland. The drug was the first once-daily orally approved one in the Europe for opioid-induced constipation treatment in adult patients. However, the British firm indicated that there would not be any impact in the current year’s financial results due to the recent agreement.
Upfront Payment
As per the agreement terms, AstraZeneca plc (ADR) (NYSE:AZN) would be paid an upfront fee of $70 million by ProStrakan to get the rights to sell, as well as, develop Moventig. However, the additional payment is related to the market access decisions in some of the European markets. That apart, there would be double-digit royalties on both sales and a milestone for the British firm.
The company was keen on promoting Moventig at the global levels and for that purpose some tactical decisions would be made by the two companies in the Euro Zone. However, the agreement does not involve any transfer of the employees or the facilities. Currently, Moventig was available in Germany, Switzerland, Austria, the Nordics, Ireland, and Great Britain. The company indicated that revenue would be added into Externalization in the British firm’s financial statements.
Recurring Externalization Revenue
AstraZeneca plc (ADR) (NYSE:AZN) said that apart from the milestone and upfront payments, the externalization of Moventig would provide the recurring externalization. Its VP for Global Product and Portfolio Strategy, Luke Miels, said that the deal was in line with its tactics to focus on its resources on three main therapy areas. Similarly, it would unlock value from key medicines in its portfolio.
Another key factor was that ProStrakan’s expertise in the pain medication area would ensure that patients gain from its first-in-class treatment in the European Union. AstraZeneca plc (ADR) (NYSE:AZN)’s Miels said that it complements its commitment to create the market, as well as, co-commercialize the key medicine in the America. ProStrakan CEO, Tom Startford, said that the company was confident to make the drug available as an option to wide patients’ range who suffer opioid-powered constipation.