Atnahs Pharma (Atnahs) has agreed to buy the global commercial rights to market Inderal (propranolol), Zestoretic (lisinopril, hydrochlorothiazide fixed-dose combination), Zestril (lisinopril), Tenormin (atenolol), and Tenoretic (atenolol, chlorthalidone fixed-dose combination) from AstraZeneca group. AstraZeneca’s move to sell the commercial rights are in line with its strategy of focusing on the pipeline of new medicines and to realising value from its portfolio of non-core mature brands. The AstraZeneca group shall, however, would retain these rights in Japan.
Moreover, Atnahs Pharma would not be having the rights to market these medicines in the US and India according to the agreement entered between it and the AstraZeneca group. These established medicines are known for treating hypertension, and they would continue to be in the market through Atnahs Pharma. Meanwhile, the Anglo-Swedish drugmaker will continue to supply these hypertension medicines during the transition period.
Inderal (propranolol) is used to reduce the frequency and severity of migraine. It is also used in the treatment of hypertension, angina, tremors and other heart-related conditions. Tenormin (atenolol) is used to lower the risk of heart attack, along with hypertension and angina. Tenoretic is a fixed-dose combination of atenolol used to treat high blood pressure. Zestril (lisinopril) is used in treating diabetic-related conditions and hypertensive renal disease. Zestoretic is a fixed-dose combination of lisinopril used in the treatment of hypertension.
As per the deal agreement, AstraZeneca Pharma will receive an upfront payment of $350 million from Atnahs Pharma for the rights of all the medicines. In addition, a $40 million future sales-contingent payments between 2020 and 2022, too have been agreed between the two companies. The Anglo-Swedish drug maker would disclose these payments in its financial statements within Other Operating Income & Expense. This divestiture by AstraZeneca group is subjected to regulatory clearances and shall be completed in the first quarter of 2020. The annual sales of Inderal, Tenoretic, Tenormin, Zestril and Zestoretic had generated $132 million in 2018 in the markets included in this agreement between AstraZeneca and Atnahs.
In a similar arrangement, in mid of December 2019, AstraZeneca PLC divested rights for Arimidex and Casodex to Juvise Pharmaceuticals. In 2017, in the United States, the rights for Arimidex and Casodex were already divested. These drugs are used for the treatment of prostate and breast cancers. AstraZeneca PLC obtained an advance payment of $181 million from Juvise Pharmaceuticals along with this a sales-contingent payment of up to $17 million in future too was agreed between the two parties. Casodex had recorded sales of $24 million and Arimidex sales stood at $37 million in 2018 in the countries covered under the agreement. The agreement became effective upon signing as there were no closing conditions relevant to the divestment.
The group maintains a portfolio of mature branded drugs that are manufactured globally by acquisition and marketing. The company is involved in the management of medicines throughout its life cycle and is into delivering high-quality drugs to the patients. The group has more than 15 plus brands with a representative base of over 90 people in more than 130 markets. The group is also a proud member of the Ethical Medicines Industry Group.
Business overview: AstraZeneca PLC
British pharmaceutical Group, AstraZeneca PLC’s (LON: AZN) core team works with the world’s leading academic, biotech research institutions and have a clinical collaboration with Immunomedics. The Group has operations all over the world with business in over 100 countries, and its medicines are consumed by millions of patients across the globe. The company was established in April 1999 after the merger of Astra AB and Zeneca PL; headquartered at Cambridge, the United Kingdom. The Group is listed on London, New York and Stockholm exchanges, with the ticker symbol AZN used in all the markets.
Business performance of AstraZeneca PLC
The product sales surged by 13 per cent (17 per cent at CER) to $17,315 million, while the product sales also surged by 16 per cent (18 per cent at CER) to $6,132 million in Q3 FY19. The reported gross margin improved by 1 per cent to 80 per cent, partially reflecting the mix of sales in 9M FY19.
The tax rates in the first nine months of 2019 reflected the impact of collaboration and divestment activity and the geographical mix of profits. The year to date core EPS surged by 39 per cent (38 per cent at CER) to $2.61, while in the third quarter of 2019, the core EPS surged by 40 per cent (36 per cent at CER) to $0.99. Cash and cash equivalents increased from the corresponding period of the last year to $3,779 million at the end of the period.
AstraZeneca PLC’s Share price performance
(Source: Thomson Reuters) Daily Chart as on Jan-28-20, before the LSE market close
At the time of writing at 09:10 AM Greenwich Mean Time, on 28th January 2020, the shares of AstraZeneca PLC were trading at a current market price of GBX 7,556.00 per share, which were up by 0.75 per cent from the last closing price on the previous day. While writing, the group’s market capitalisation was approximately £98.58 billion.
The shares of AstraZeneca PLC traded at their high-price mark of GBX 8,227.88 on 7th October 2019 and at a low-price mark of GBX 5,312.00 on 28th January 2019 in the last twelve-month period. The Group’s shares were trading at 42.24 per cent higher than the last twelve-month low-price mark and at 8.17 per cent lower from the last twelve-month high-price mark, as can be seen in the price chart at the current trading level.
While writing, the stock’s traded volume stood at 90,428. The stock’s 5-day daily average traded volume of the Group was 1,311,848.80; 30 days daily average traded volume- 1,262,216.33 - and 90-days daily average traded volume – 1,564,170.48. The beta of the Group’s stock was recorded at 0.78, which indicates lesser volatility with a dividend yield of 2.92 per cent.
The Group’s shares have generated a positive return of 1.58 per cent in the last quarter. However, from the start of the year to till date, the Group’s stock was down by 1.41 per cent. Since last month, the Group’s stock has given investors a negative return of 3.16 per cent.