AstraZeneca acquires Omthera Pharmaceuticals

LONDON—Hoping to bolster its cardiovascular and metabolicdisease pipeline—and recover from the loss of lucrative patents and pastfailures in experimental medicines—AstraZeneca PLC has entered into adefinitive agreement to acquire Princeton, N.J.-based Omthera Pharmaceuticals,a company that is focused on the development and commercialization of newtherapies for abnormal levels of lipids in the blood, a condition referred toas dyslipidemia.

The deal, announced May 28, is worth up to $443 million.Under the terms of agreement, AstraZeneca will pay $323 million for Omthera,with the option of an additional $120 million in future payments based on theperformance of Omthera's pipeline, according to a company news release. Subjectto the approval of Omthera's shareholders as well as other conditions,including customary regulatory approvals, the transaction is expected to closein the third quarter.

The acquisition of the U.S.-based specialist in fishoil-derived medicine underscores a drive to revive AstraZeneca's fortunesthrough a series of bolt-on deals, as opposed to large-scale transactions. Itis its second purchase in the cardiovascular field, following the April 3acquisition of early-stage U.S. biotech firm AlphaCore Pharma.

The acquisition would allow AstraZeneca to get in on therapidly growing fish oil market designed to treat high levels of triglyceridesand high-risk patients with cardiovascular disease. The centerpiece of thisagreement for AstraZeneca is Epanova, a fish oil capsule currently inlate-stage trial, a key treatment for dyslipidemia.

"The number of people with elevated triglyceride levels isrising rapidly across the world, due in part to the increasing prevalence ofobesity and diabetes," AstraZeneca CEO Pascal Soriot stated in a news release."There is a clear need for effective and convenient alternatives to some of theexisting treatments. Epanova offers real potential—both as a distinctivemonotherapy for the treatment of hypertriglyceridemia—and in combination withAZ's cholesterol fighter Crestor for patients at high risk of adverse cardiovascularevents."

Acquiring Epanova puts AstraZeneca into direct competitionwith GlaxoSmithKline PLC, which sells fish oil drugs for heart disease.

"Given the number of patients who contend with various formsof dyslipidemia, there is a high unmet need for this type of therapy, andEpanova offers near-term revenue potential as Omthera expects to file theirinitial NDA for hypertriglyceridemia by early July 2013 and launch in 2014 inthe U.S.," says Michele Meixall, director of corporate communications at AstraZeneca'sNorth America headquarters in Wilmington, Del. "Other indications are expectedto follow."

A fixed-dose combination of Epanova and Crestor "would be astrategic fit with our overall commercial portfolio and with Crestor, inparticular, as it capitalizes on Crestor's success and acceptance by physiciansand patients in the marketplace," Meixell adds.

In the United States alone, approximately 44 million adultshave triglyceride levels above 200mg/dl, she says. Approximately one-half ofthose are diagnosed. One-half of the diagnosed population, which isapproximately 11 million adults, receives drug treatment of some kind. Omega-3supplements are also widely sold in the United States without a prescription inpharmacies, groceries, health food stores and other locations.

"Because they are not regulated, the purity and compositionof these products is questionable," Meixall says. "The vast majority ofsupplements are not comparable to prescription omega-3 products. They lacksimilar levels of EPA and DHA (which are considered the key "beneficial"omega-3 oils). Thus, patients would need to consume substantially more capsulesto begin to achieve the same EPA/DHA levels of Epanova."

This increases side effects from oil consumption, unwantedcalories and significant costs. Supplements that claim to approach the purity of Lovaza or Vascepa arenot covered by health insurance and are expensive, costing up to $100 a month.

Based on currently marketed products, AstraZeneca estimatesthe total prescription omega-3 market generated at over $2 billion in salesworldwide in 2012. The company believes there will be increased growth in theprescription omega-3 market based on the expected introduction, and resultingincreased promotion and awareness, of new prescription omega-3 products, aswell as the emergence of new clinical data regarding the efficacy of omega-3son cardiovascular health.

"Building our pipeline in the area of cardiovascular andmetabolic disease is a strategic priority for AstraZeneca and underscores ourcommitment to patients suffering from related conditions in this area of highunmet need," Meixall says.

As for the fate of Omthera and its 14 employees, Meixallsays AstraZeneca "will develop a retention plan for key employees to ensurethat the right team is in place to support successful regulatory approval."