AstraZeneca Sells Revenue Stream From Humira To Royalty Pharma For $700 Mil.
This article was originally published in The Pink Sheet Daily
Executive Summary
AstraZeneca says it will use proceeds from the deal to reinvest in biologics.
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AstraZeneca will use the proceeds from the sale of a royalty interest in Abbott's anti-TNF therapy Humira to reinvest in biologics, CFO Jon Symonds reported during the company's third quarter sales and earnings announcement Oct. 26. The company will sell the royalty interest it gained in adalimumab as part of the acquisition of Cambridge Antibody Technology to Royalty Pharma for $700 mil. "While we don't have an immediate need for cash, it does, I believe, signal a necessary balance sheet discipline to preserve our investment capacity," Symonds stated. "As our biological strategy matures over time, I have no doubt that this and more will be reinvested to support future growth." AstraZeneca announced plans to acquire CAT in May for $1.07 bil. to bolster its biologic portfolio (1 (Also see "AstraZeneca Hears CAT’s Meow With Biotech Acquisition" - Pink Sheet, 15 May, 2006.)). The deal also included access to royalty revenues from human monoclonal antibody technologies already licensed out to companies including Abbott and Wyeth. Abbott has paid royalties to CAT since the launch of Humira. Following the acquisition, New York City-based Royalty Pharma will receive royalty revenue formerly payable to CAT based on future sales of the rheumatoid arthritis treatment. Royalty Pharma is an acquirer of revenue-producing intellectual property, focusing primarily on late-stage biopharmaceutical products with a market capitalization of $2 bil., according to the firm. The company owns royalty interests in Amgen's Neupogen and Neulasta , Genentech's Rituxan , and Gilead's Emtriva and Atripla , among others. Humira sales may benefit from a new indication early next year. Abbott announced Oct. 26 that FDA has granted a priority review to its sBLA for Humira as a treatment for moderately to severely active Crohn's disease. The application was submitted in Sept. 7, giving it a March 7 user fee date (2 (Also see "Crohn’s Competition Coming" - Pink Sheet, 7 Sep, 2006.)). - Jessica Merrill ([email protected]) |