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LONDON—With a stated aim of strengthening its respiratoryportfolio and a presumed aim—based on market-watchers' observations aboutrecent other business moves—of bolstering its late-stage pipeline in general,AstraZeneca noted June 10 that it has entered into a definitive agreement toacquire Redwood City, Calif.-based Pearl Therapeutics, a privately held companyfocused on developing inhaled small-molecule therapeutics for respiratorydisease.
 
 
According to AstraZenca, the potentially $1.15billion acquisition will give it "access to a potential new treatment forchronic obstructive pulmonary disease (COPD), currently in late-stagedevelopment, and inhaler and formulation technology that provides a platformfor future combination products." 
 
Pearl's lead product is PT003, a fixed-dosecombination of formoterol fumarate, which is a long-acting beta-2-agonist(LABA), and glycopyrrolate, which is a long-acting muscarinic antagonist(LAMA). According to AstraZeneca, LABA/LAMA combinations are expected to becomean important new class of treatment for COPD.
 
 
Under the terms of the agreement, AstraZeneca willacquire all of Pearl's shares for an initial consideration of $560 millionpayable on completion of the deal, and then deferred consideration of as muchas $450 million if specified development and regulatory milestones are reached "inrespect of any triple combination therapies and selected future products thatAstraZeneca develops using Pearl's technology platform."
 
 
In addition, sales-related payments of as much as$140 million are part of the deal, if pre-agreed cumulative sales thresholdsare exceeded.
 
 
The proposed transaction is subject to customaryregulatory approvals and is expected to close in the third quarter of 2013.
 
 
"Chronic obstructive pulmonary disease continuesto increase worldwide and there is a growing need for the next generation ofinhaled combination products," said Pascal Soriot, CEO of AstraZeneca. "Pearl'snovel formulation technology, together with its development products andspecialist expertise are a great complement to AstraZeneca's long-establishedcapabilities in respiratory disease, one of our core therapy areas. Combinedwith our on-market portfolio, including Symbicort, and our strong pipeline, theagreement will enable us to offer further distinctive treatment options acrossthe full spectrum of COPD and asthma to patients, physicians and payers."
 
 
A global Phase III program has already begun forPT003 to test its ability to improve lung function in patients with moderate tosevere COPD. PT003 is delivered by inhalation via a pressurized metered doseinhaler using Pearl's novel co-suspension formulation technology. Thistechnology platform will allow AstraZeneca to explore combinations of existingand novel technologies, including a triple fixed-dose combination (LABA/LAMAand inhaled corticosteroid) that could be accelerated into Phase II clinicaldevelopment.
 
 
"We have been impressed with AstraZeneca'sexpertise, focus and speed of execution and are delighted to be joining thegroup, a global leader in respiratory disease, as we believe that Pearl will bean excellent fit for its respiratory portfolio," said Kevin Ferro, chairman ofthe board of Pearl Therapeutics and CEO of Vatera Healthcare Partners, Pearl'slead investor. "We believe AstraZeneca will provide significant value insupporting the further development and registration of our lead product, PT003,and in leveraging our technology platform to realize future products includinga triple-agent therapy for respiratory disease."
  

The acquisition of Pearl Therapeutics reportedlywill have no impact on AstraZeneca's financial guidance for 2013.
 

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