AstraZeneca, a global, innovation-driven biopharmaceutical business, has entered into an agreement with Perrigo Company plc, a top five global OTC consumer goods and pharmaceutical company, for the divestment of US rights to Entocort (budesonide), a gastroenterology medicine for patients with mild to moderate Crohn’s disease, an area of medicine outside AstraZeneca’s strategic focus.
Under the terms of the agreement, Perrigo will pay AstraZeneca $380 million upon completion of the transaction to acquire the rights to sell Entocort capsules and the authorised generic Entocort capsules marketed by Par Pharmaceuticals. The transaction does not include the transfer of any AstraZeneca employees or facilities.
Luke Miels, executive vice president, global product and portfolio strategy, AstraZeneca, said, “Our agreement with Perrigo completes the global divestment of Entocort, emphasising our strategic focus on three main therapy areas and providing further simplification of our supply chain. We are pleased to be working with Perrigo to ensure patients with Crohn’s disease in the US continue to benefit from this important medicine.”
Joseph C. Papa, chairman, president and CEO, Perrigo, said, “The addition of Entocort represents a strong strategic fit with our portfolio of prescription medicines. It supports our commitment to providing effective, affordable treatments to patients with gastroenterological conditions and we look forward to building on the brand’s success in the US market.”
US product sales of Entocort were $89 million in the year-to-date (at nine months 2015). The transaction is expected to complete by the end of 2015, subject to customary closing conditions. AstraZeneca’s 2015 core earnings per share guidance was upgraded at year-to-date & third quarter 2015 results on November 5 and is maintained as it was provided, in the range of mid to high single-digit percentage increase versus the prior year and at constant exchange rates. As AstraZeneca will no longer retain an interest in the US rights to Entocort, the upfront gross receipt will be reported in other operating income in the company’s financial statements.
This agreement, along with the agreement entered into in July 2015 with Tillotts Pharma AG, part of the Zeria Group, for the divestment of global rights to Entocort outside the US, completes the global divestment of Entocort.
In capsule formulation, Entocort is a first-line therapy indicated for the induction and maintenance of clinical remission of mild to moderate active Crohn's disease involving the ileum and/or the ascending colon. As an enema, Entocort is indicated for the induction and maintenance of clinical remission of distal ulcerative colitis in the rectum, sigmoid colon and descending colon.