AZ caps busy week of hiveoffs with $330M Rhinocort sale to J&J's Cilag

AstraZeneca London

AstraZeneca clearly isn’t interested in what critics have to say about its rights-licensing and divestment strategy. Friday, it announced yet another selloff, giving it three on the week at a total value of up to $2 billion.

The British drugmaker has inked a pact to hand over ex-U.S. rights for nasal spray Rhinocort Aqua to Johnson & Johnson affiliate Cilag GmbH, and it’ll net $330 million in return. Rhinocort, used to treat inflammation inside the nose and swelling of the nasal lining, uses budesonide as its active ingredient--a compound better known as asthma and COPD med Pulmicort.

The way AZ sees it, the deal will allow it to “concentrate our efforts in Respiratory as one of our three strategic therapy areas, on transforming the treatment of asthma and COPD, where budesonide remains a key component of our marketed as well as pipeline medicines.”

And it’s hoping a more streamlined respiratory effort will help it wrestle share from its Big Pharma rivals. Earlier this year, AstraZeneca went head-to-head with GlaxoSmithKline and Boehringer Ingelheim when it launched LAMA/LABA combo Bevespi Aerosphere, and it’s closing in on a chance to take on GSK, Novartis and Teva in the severe asthma field with prospect benralizumab.

Respiratory revenues will be even more critical to the pharma giant now that heart med Brilinta has come up short in peripheral artery disease. AZ unveiled the news earlier this week, simultaneously dubbing its 2023 sales prediction of $3.5 billion for the drug “unrealistic.”

Meanwhile, the Rhinocort deal isn’t AZ’s first effort at sharpening its respiratory focus--and not even the first this week. Wednesday, the company said it would sell Insmed the rights to early-stage treatment AZD7986 for $30 million upfront and another $120 million and royalties down the line.

And the company is cleaning house in other disease areas, too. To kick off the busy week, it announced it would pass off development of experimental GI therapy MEDI2070 to Allergan for a whopping $1.3 billion.

The last couple years have seen a bevy of other in-kind moves, too: It dumped gout med Zurampic with a pair of rights deals, pawned ownership of a pair of heart drugs to China Medical, netted $500 million by selling a partnership to Eli Lilly for an Alzheimer’s drug, scored $200 million from Daiichi Sankyo for development rights to constipation treatment Movantik, scored $215 million by licensing out GI product Entocort to Tillotts Pharma—and the list goes on.

AZ, of course, isn’t alone with its “slim-down” mentality, but nobody has pursued the strategy quite the way the British drugmaker has. The company’s rivals have mostly been all about bailing out of larger fields--such as animal health (Pfizer, Sanofi), consumer health (Merck) and vaccines (Novartis). Those that have stepped away from certain disease areas have done so through fewer deals, rather than taking AstraZeneca’s fire-sale approach.

Not everyone’s on board with AZ’s thinking--Deutsche Bank analyst Richard Parker has said the strategy is of “questionable sustainability”--but CEO Pascal Soriot certainly is. He’s argued that bidding farewell to non-core businesses will boost its finances now and help AZ invest for the future--something it’ll need to do if it wants to really swing an effective turnaround.

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