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AstraZeneca offloads remaining rights to anaesthetic portfolio to Aspen for US$766mln

“Disposing the remaining rights to the medicines allows both companies to benefit from greater efficiencies as AstraZeneca continues to focus our resources on our three main therapy areas”
medical syringe
AGI will pay US$555mln upfront, followed by a further US$211mln

Drugs giant AstraZeneca PLC (LON:AZN) has agreed to offload the remaining rights to its anaesthetic medicines to a division of Aspen Group for up to US$766mln.

Aspen Global Incorporated (AGI) will acquire the residual rights to Diprivan, EMLA, Xylocaine/Xylocard/Xyloproct, Marcaine, Naropin, Carbocaine and Citanest.

The two parties had already entered into an agreement last summer, under which AGI gained exclusive commercialisation rights to the medicines in markets outside the US.

AGI is now paying an initial US$555mln for the remaining rights to the intellectual property and manufacturing know-how related to the anaesthetics, plus up to a further US$211mln based on performance milestones.

AstraZeneca said it would continue to manufacture and supply the medicines to AGI during a transition period of up to five years.

AstraZeneca, AGI and patients have all benefitted from the successful commercial agreement we established last year,” said Astra’s executive vice president Mark Mallon.

“As our relationship has evolved, AGI has shown that it is in a strong position to maximise the value and reach of the anaesthetic medicines through its extensive commercial network.

“Disposing the remaining rights to the medicines allows both companies to benefit from greater efficiencies as AstraZeneca continues to focus our resources on our three main therapy areas.”

READ: AstraZeneca offloads remaining rights to anaesthetic portfolio to Aspen for US$766mln

Liberum downgrades to ‘hold’ on valuation ground

City broker Liberum has downgraded Astra to ‘hold’ from ‘buy’ as it thinks shares are up with events for the time being.

“As we had expected before Mystic, strong data from FLAURA and PACIFIC have driven Astra's shares almost back to where they were before the PFS failure,” wrote analyst Roger Franklin.

“With this value having come through, the shares are now at c.£49 which in our view fairly prices the ex-Mystic/new 'I-O' business.”

Franklin added that shares could head higher on positive data read-outs, particularly from MYSTIC early next year, but added that the chance of that happening is now “materially lower” after the recent progression-free survival failure.

He upped his price target to £50, slightly higher than £48.56 which is where the share price finds itself this morning.

READ: AstraZeneca lung cancer trial results impress but risks remain, analysts say

--Updates for share price and broker comment--

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