LONDON, U.K.—AstraZeneca has entered into an agreement with Perrigo Company plc for the divestment of U.S. 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 authorized 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, emphasizing 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 U.S. 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 U.S. market.”
U.S. 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 5 November 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 U.S. 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 U.S., 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.
Meanwhile, according to a report in BioSpace, layoff notifications went out on Nov. 19, a Perrigo spokesperson told the Holland, MI Sentinel, but would not verify the number of layoffs, or which departments would be impacted. The layoffs are part of the company’s overall restructuring plan to increase profitability and help fend off a hostile takeover bid by Mylan. The plan, which includes an announced layoff of 800 employees, consolidation of its global supply chain, as well as operations and production management teams, is estimated to save the company about $105 million. Perrigo also plans to refine its portfolio, selling off its U.S. vitamins, minerals and supplements business, which it projects will save $35 million annually. Perrigo, headquartered in Ireland, has grown to become the world's largest manufacturer of OTC products and supplier of infant formulas for the store brand market. The company is also a leading provider of generic extended topical prescription products and receives royalties from multiple sclerosis drug Tysabri. Perrigo provides "Quality Affordable Healthcare Products®" across a wide variety of product categories and geographies primarily in North America, Europe, and Australia, as well as other markets, including Israel and China.
AstraZeneca is a global, innovation-driven biopharmaceutical business that focuses on the discovery, development and commercialization of prescription medicines, primarily for the treatment of diseases in three main therapy areas - respiratory, inflammation, autoimmune disease (RIA), cardiovascular and metabolic disease (CVMD) and oncology, as well as infection and neuroscience diseases. AstraZeneca operates in over 100 countries and its medicines are used by millions of patients worldwide.