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Will AstraZeneca’s Corporate Developments Help?

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Recent corporate developments

AstraZeneca (AZN) entered into various collaborative agreements in 1Q16. These include agreements for development and commercialization rights of drugs to various companies. Below are some of its recent corporate developments:

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AstraZeneca and CMS

In 1Q16, AstraZeneca entered into the following two agreements with CMS (China Medical System Holdings):

  • As of February 2016, AstraZeneca has commercialization rights in China for Plendil, a calcium channel blocker. These revenues will be included in the company’s externalization revenues.
  • AstraZeneca will divest global rights for Imdur, a cardiovascular drug to prevent angina in patients with heart disease, to CMS and Tibet Rhodiola Pharmaceutical Holding, a CMS associate company. The deal was announced in February 2016 and is valued at $190 million. It’s expected to be closed in the second quarter of 2016.

AstraZeneca and Eli Lilly

AstraZeneca and Eli Lilly (LLY) have entered into an agreement for the development and commercialization of AZD3293, a BACE (beta-site APP cleaving enzyme-1) inhibitor. Eli Lilly achieved a milestone by completing Amaranth, a Phase II clinical study, in April 2016. AstraZeneca will receive a milestone payment of $100 million. This revenue will be reported as externalization revenues in AstraZeneca’s 2Q16 results.

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AstraZeneca and ProStrakan

AstraZeneca and ProStrakan (PSK) entered into an agreement in March 2016 for development and commercialization rights of Moventig, a drug for the treatment of constipation, in the European Union, Iceland, Switzerland, Norway, and Liechtenstein. The revenues will be included in AstraZeneca’s externalization revenues.

AstraZeneca and Ironwood Pharmaceuticals

AstraZeneca and Ironwood Pharmaceuticals (IRWD) entered into an agreement in April 2016 for exclusive rights to Zurampic, a recently approved drug for the treatment of hyperuricemia, in US markets. AstraZeneca will manufacture and supply Zurampic to Ironwood.

To avoid risks, you can consider the VanEck Vectors Pharmaceutical ETF (PPH), which holds 4.6% of its total assets in AstraZeneca. It holds 5.5% in AbbVie (ABBV), 5.4% in Merck & Co. (MRK), and 5.6% in Pfizer (PFE).

In the final part of our series, we’ll take a look at AstraZeneca’s recent product approvals and designations.

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