UK drugs major AstraZeneca PLC (LON:AZN) has struck a deal to sell part of its antibiotics business to US group Pfizer (NYSE:PFE) for up to US$1.575bn.
The deal is for its late-stage small molecule antibiotics business and involves three already-approved antibiotics - Merrem, Zinforo and Zavicefta - and two drugs in clinical trials (ATM-AVI and CXL).
It will give Pfizer the right to sell those drugs in most markets outside the USA.
It reportedly does not include AstraZeneca's portfolio of biological anti-infective drugs, or the business it spun out last year to focus on the development of anti-infectives.
"The agreement reinforces AstraZeneca's focus on developing transformational medicines in its three main therapy areas," Astra said.
AstraZeneca shares are down 0.4% to 5,042p at the time of writing.
The agreement is expected to close in the fourth quarter of 2016. Pfizer will pay US$550 million up front plus an unconditional US$175 million in January 2019.
Then, depending on the progress of the drugs, the US giant will pay a further US$850 million plus royalties.
Pfizer is on a roll at the moment. On Monday, it confirmed it had agreed to buy cancer drug developer Medivation (NASDAQ:MDVN) for US$14bn.
The move adds the blockbuster prostate cancer treatment drug Xtandi to Pfizer’s growing oncology portfolio. It had sales of US$330mln in the latest quarter and is key to the company’s target to grow annual sales this year by 50%.
Medivation has been on the block since April when French group Sanofi offered US$52.50 per share.
Though sizeable, the deal was still small compared to Pfizer’s proposed US$160bn merger with Allergan that fell through in April this year due to a clampdown on tax dodging deals pushed through by President Obama.
Pfizer has also failed in an earlier attempt to take over UK pharma AstraZeneca, itself rumoured at one time to be interested in Medivation.
Astra shares added 0.2% to stand at 5,072p on the day.