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AstraZeneca sells drug rights to Covis Pharma for up to $371 million

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The company has entered into an agreement with Covis Pharma B.V. to sell its rights to the medicines Alvesco (ciclesonide), usedfor the treatment of persistent asthma, and Omnaris and Zetonna (ciclesonide), used for the treatment of nasal symptoms associated with rhinitis.

The rights cover markets outside the US and the US royalties for the medicines. Covis Pharma currently commercialises Alvesco, Omnaris and Zetonna in the US and will become the owner of the medicines upon closing. The transaction does not include the transfer of any AstraZeneca employees or facilities.

“One of our strategic objectives is to divest parts of our portfolio, allowing us to allocate resources to develop innovative new medicines to address unmet patient needs. Covis Pharma has strong capabilities in marketing medicines around the world, and our agreement with them means patients will continue to benefit from Alvesco, Omnaris and Zetonna,” says Mark Mallon, Executive Vice President, Global Product and Portfolio Strategy.

Financial considerations

Covis Pharma will pay AstraZeneca $350 million upon closing, in addition to conditional sales-related payments of up to $21 million over four years from 2019. The agreement is subject to customary closing conditions and is expected to complete by the end of 2018.

As AstraZeneca will not maintain a significant ongoing interest in the medicines following completion, the payments will be recognised as Other Operating Income in the company’s financial statements. Combined 2017 Product Sales of Alvesco, Omnaris and Zetonna,recorded by AstraZeneca, were $106 million. The agreement does not affect the Ccmpany’s financial guidance for 2018.

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