Over the past few years, AstraZeneca has traded drug rights for cash in a series of deals totaling billions of dollars—and now it's pulled off another one. The company has struck a deal to sell Nexium rights in Europe and Vimovo rights worldwide to Grünenthal in exchange for up to $922 million.
Grunenthal will pay $815 million up front plus up to $107 million in milestones for the drug rights, which exclude Vimovo in the U.S. and Japan. While the ex-blockbuster stomach pill Nexium has lost its patent protection in most of the world, Vimovo, a pain drug, holds patents in Europe until 2025, AstraZeneca said.
Together, the two drugs pulled in $158 million in the relevant markets in the first half of this year. The company will continue to manufacture Nexium for Grünenthal under a supply agreement. AZ expects to close the transaction before year's end.
Vimovo is used to treat arthritis pain, and Nexium, a proton pump inhibitor, is approved to treat gastroesophageal reflux disease and other conditions.
AstraZeneca said the drugs fall outside its current cornerstones in oncology, cardiovascular and metabolic disease, and respiratory ailments. In a statement, EVP of global product and portfolio strategy Mark Mallon said the deal allows the company to “realize value from our successful medicines while redeploying our resources” to develop new drugs in its focus areas.
As market watchers know, AstraZeneca is no stranger to such deals. In May, the company unloaded certain rights to Seroquel and Seroquel XR to Luye Pharma for $538 million. That deal followed several others that have yielded billions of dollars in cash. Critics have said the strategy is unsustainable, but AstraZeneca executives have pitched the moves as a way forward through patent losses until the company can grow sales from newer drugs.
In a huge agreement inked last year, AZ teamed up with Merck on its PARP inhibitor Lynparza, trading half of its revenue rights in exchange for $1.6 billion up front, plus milestones that could take the total deal value to $8.5 billion.