AstraZeneca PLC is selling the U.S. rights to its lung disease drug Synagis to Swedish Orphan Biovitrum AB, or Sobi, for $1.5 billion in cash and shares.
The U.K.-based drugmaker will receive an up-front payment of $1 billion in cash and $500 million worth of ordinary shares, representing an 8% ownership interest in Sobi. AstraZeneca will also receive up to $470 million in sales-related payments for Synagis, it said in a news release.
Around 130 AstraZeneca employees will also transfer to Sobi as part of the deal.
Synagis, or palivizumab, treats serious lower respiratory tract infection, or LRTI, in infants and young children. The disease is caused by the respiratory syncytial virus, or RSV — a common, seasonal virus that usually begins with cold-like symptoms but can spread to the lungs.
The Swedish biopharmaceutical company will also have the right to participate in AstraZeneca's share of U.S. profits and losses for another RSV treatment called MEDI8897. The experimental therapy is being jointly developed by AstraZeneca and Sanofi's vaccines unit, Sanofi Pasteur.
For MEDI8897-related considerations, AstraZeneca will get $175 million milestone payments after filing of a biologics license application. Additionally, the company will receive $110 million in potential net payments subject to the achievement of other MEDI8897 profit and development-related milestones, along with $60 million in total non-contingent payments over 2019-2021.
The deal is expected to close in early 2019, subject to customary closing conditions.
AstraZeneca will use the sale's cash proceeds for general corporate purposes.
"We continue to streamline our portfolio, allowing AstraZeneca to allocate resources more effectively, while Sobi's focus on Synagis will enable infants in the US to continue benefiting from this important treatment," AstraZeneca CEO Pascal Soriot said.
On Nov. 6, the company agreed to sell rights to asthma maintenance drug Alvesco and rhinitis drugs Omnaris and Zetonna to Switzerland's Covis Pharma.
