AstraZeneca ($AZN) has been working hard lately to get its sales on an upward track, a feat it expects to achieve in the not-too-distant future. In the meantime, though, it's looking to plug the holes, and it struck a divestment deal Thursday to help do just that--and streamline its focus, too.
The British drugmaker has inked a pact to send its gastrointestinal drug Entocort to Tillotts Pharma, part of Japan's Zeria Group, in exchange for $215 million, it said. AZ had rights to the med outside the U.S., where it generated $53 million last year.
|AstraZeneca's Luke Miels|
The deal, which AstraZeneca expects to close in the second half of this year, "reinforces our strategic focus on select therapy areas," Luke Miels, EVP of global product and portfolio strategy, said in a statement. It's a tune the company has been singing for a while now, Reuters points out. The drugmaker has struck up cash-generating transactions with Eli Lilly ($LLY) in Alzheimer's and with Daiichi Sankyo, letting the Japanese pharma get in on sales of Movantik in exchange for $200 million.
Other Big Pharma peers have been singing it, too. GlaxoSmithKline ($GSK) was an early adopter of the slim-down strategy, sending thrombosis brand Arixtra and Fraxiparine to South Africa's Aspen back in 2013. This January, Johnson & Johnson ($JNJ) agreed to sell its Nucynta pain franchise to Depomed ($DEPO). And lately, AZ itself has been benefiting from new giant Allergan's ($AGN) cast-off moves, nabbing respiratory products Tudorza Pressair and Daliresp.
But for AZ, which is shooting for some lofty sales targets after successfully fending off a Pfizer ($PFE) bid, the cash factor is especially important. CEO Pascal Soriot has argued that bidding farewell to non-core businesses will boost its finances now and help it invest for the future, but not all analysts are convinced it's a great pattern to fall into.
Deutsche Bank analyst Richard Parkers is among the skeptics; In April, after AstraZeneca netted $450 million by letting Celgene ($CELG) in on development of a blood-cancer immunotherapy, he told Reuters that income from the agreement--and others like it--was of "questionable sustainability."
- read AZ's release
- get more from Reuters
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