Through a deal worth $302m (£234m), AstraZeneca plc (ADR) (NYSE:AZN) has sold the rights to its migraine drug Zomig to Germany’s Grunenthal. The British firm has been stripping off its old medicine to create room for more important areas of the pipeline, a move which is expected to bring back its lost fortunes. The company also claims that the pain relief drug is not part of its strategic focus.
To obtain the rights to market and sell the drug, Grunenthal will part with $200m upon completion of the deal. The $102 million will come in the future and in milestone payments. The two have also agreed that the buyer will acquire the U.S. rights, which were previously in the hands of Impax Pharmaceuticals.
For Gruenthal, Zomig adds to the company’s pain management portfolio
Both companies will somewhat be benefiting from the deal. For AstraZeneca, it’s part of the restructuring as it tries to reallocate its resources to meaningful goals. The British firm is so keen on immuno-oncology drugs and respiratory portfolio as it strives to catch up with its rivals Merck & Co., Inc. (NYSE:MRK) and Bristol-Myers Squibb Co (NYSE:BMY).
On the other hand, the German firm says that Zoming, which is available in three forms, will top up its portfolio. Having been approved in 1997, the Nasal spray has been doing badly in terms of sales, but Gruenthal is optimistic of scaling up its sales, which have been declining. Its revenues were at €1.4bn (£1.2bn) in 2016.
AstraZeneca is investing heavily in oncology drugs
Subject to meeting regulatory approvals, the deal should be closing in the second quarter of this year. The Zomig agreement will not in any way affect AstraZeneca’s financial guidance and it can fully turn all its efforts towards its oncology drugs. It has had promising trial results with its breast cancer drug, which is expected to boost survival prospects for some cancer patients.
AstraZeneca is now looking up to its Combo strategy in hope that it can get a better chance at the competitive market. In the meantime, AstraZeneca’s stock closed at $34.82 a fall of $0.04 or 0.11%.
