5th Feb 2015 07:34
LONDON (Alliance News) - AstraZeneca PLC Thursday moved to further bolster its respiratory drug pipeline by acquiring the rights to Actavis' branded respiratory business in the US and Canada, as it reported lower earnings for 2014 due to increased investments it is making in accelerating its existing portfolio.
The news came as medical devices company Smith & Nephew PLC reported higher 2014 earnings, buoyed by a sustained improvement in US reconstruction markets and higher growth in emerging markets, and GlaxoSmithKline sold its entire stake in Gemab AS.
AstraZeneca is accelerating its drug pipeline because many of its existing best-selling drugs are reaching the end of their patents in a relatively short space of time. It had also pledged to investors that it would move faster on the refresh in the wake of its successful defence last year against a takeover attempt by US rival Pfizer Inc. Respiratory drugs are one of the key areas AstraZeneca is targeting.
The pharmaceutical giant said it will buy they rights to Actavis' North American respiratory business for an initial USD600 million plus low single-digit royalties above a certain revenue threshold. AstraZeneca will also pay Actavis an additional USD100 million and Actavis has agreed to a number of contractual consents and approvals, including certain amendments to the ongoing collaboration agreements between AstraZeneca and Actavis. It didn't give any further details of the amendments.
The deal means AstraZeneca will own the development and commercial rights in the US and Canada for chronic obstructive pulmonary disease Tudorza Pressair and Daliresp. It will also own development rights in the countries for LAS40464, a dry powder inhaler treatment already approved in the EU under the brand name Duaklir Genuair.
"The acquisition of Tudorza Pressair and Daliresp will immediately add on-market revenues and complements AstraZeneca's respiratory portfolio by broadening the choice of treatments and formulations offered to patients and physicians. The two products had combined annual sales in the US of approximately USD230 million in 2014," the company said in a statement.
AstraZeneca reported core earnings per share of USD4.28 for 2014, down 15% on the year after its fourth quarter core EPS dropped 38% to USD0.76. Revenue rose 1% on the year to USD26.10 billion for 2014 as a whole, but was down 2% in the fourth quarter to USD6.68 billion. The company suffered an exchange rate hit: revenue was up 3% for the full year and 2% in the fourth quarter at constant rates, while core EPS dropped 8% during the year and 28% in the fourth quarter at constant rates.
The company said earnings were down due to investments it is making in its growth platforms and in accelerating its drugs pipeline. It had previously forecast that earnings would suffer due to these investments for a couple of years, with the company set to return to growth in 2017.
For 2015, it expects sales revenue to decline by mid single-digit percent at constant exchange rates, while core EPS is expected to increase by low single-digit percent, also at constant rates.
"Our guidance for 2015 reflects our focus on creating value by investing in our new brands and exciting pipeline while we continue improving productivity to protect our profitability in the face of patent expiries. With the depth of our science and the momentum we have built across our organisation, we are on track to return to growth by 2017 and are well positioned to deliver our long-term goals," Chief Executive Pascal Soriot said in a statement.
AstraZeneca said it will pay a second interim dividend of USD1.90 a share, bringing its full-year dividend to USD2.80. It said it is sticking to its policy of maintaining or growing dividends each year.
Big UK rival GlaxoSmithKline PLC Wednesday said it has agreed to sell nearly 4.5 million shares in Genmab through an accelerated bookbuild. The shares are its entire 7.9% stake in the Danish business. The final offer price was set at DKK430.00 a share, meaning gross proceeds were about GBP194 million.
By Steve McGrath; [email protected]; @stevemcgrath1
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