Share

AstraZeneca to buy Actavis lung drugs

London - AstraZeneca has agreed to buy Actavis' branded respiratory drug business in the United States and Canada for an initial $600m as it seeks external deals to ensure growth.

AstraZeneca will also pay another $100m, after Actavis agreed to a number of changes to ongoing agreements between the two firms.

Thursday's announcement came as Britain's second-biggest drugmaker posted fourth-quarter results that fell short of expectations and said 2015 sales revenue would decline by a mid single-digit percent at constant exchange rates.

Core earnings per share, however, are forecast to increase by a low single-digit percent this year.

Shares in the company slid 2% in early trade.

The British group, which saw off a $118bn bid by Pfizer last year, said its sales in the fourth quarter fell 2% to $6.68bn, generating core earnings down 38% at 76 cents a share.

Industry analysts had on average forecast sales in the quarter of $6.79bn and earnings of 82 cents a share, according to Thomson Reuters.

Buying the Actavis respiratory drugs builds on AstraZeneca's acquisition of Almirall's lung drugs last July and gives it global rights to inhaled medicines containing aclidinium, which helps open airways. Actavis had owned North American rights under an earlier agreement with Almirall.

Respiratory is a key therapeutic area for AstraZeneca, whose chief executive Pascal Soriot is determined to show his company has a strong independent future.

AstraZeneca has won over many investors with its line-up of new cancer drugs but it faces near-term pressure on profits from cheap generic copies of older drugs, with the arrival of copies of its heartburn and ulcer medicine Nexium in the United States a big challenge in 2015.

Nexium lost US exclusivity at the end of May 2014 but a generic version is only now set to reach the market. The recent green light for Teva's generic follows manufacturing problems at India's Ranbaxy, which had been in line to market the first copycat version.

Although sales are set to slide again this year, shareholders may take some heart from AstraZeneca's forecasts that core earnings are set to increase from the $4.28 reported for 2014.

Soriot and his team have good reason to ensure earnings do not slip, since management incentives only vest fully if EPS remains at or above $4.20.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.09
-1.0%
Rand - Pound
24.05
-0.7%
Rand - Euro
20.58
-0.5%
Rand - Aus dollar
12.39
-0.3%
Rand - Yen
0.13
-0.9%
Platinum
894.64
-0.3%
Palladium
992.99
-0.9%
Gold
2,197.50
+0.1%
Silver
24.44
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,880
+0.3%
All Share
74,091
+0.3%
Resource 10
56,315
+1.2%
Industrial 25
103,611
+0.3%
Financial 15
16,459
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders