AstraZeneca Plc announced on Thursday it would buy the rights to Actavis’ branded respiratory drug business as it reported disappointing quarterly performance.
Britains second-largest drugmaker said it would pay an initial $600 million in order to distribute Actavis’ Tudorza Pressair and Daliresp drugs in the US and Canada. The two drugs generated around $230 million in sales through 2014 in the US alone.
The agreement also gives the right to AstraZeneca to develop its own treatment for chronic obstructive pulmonary disease in the US and Canada. The company said the drug has been approved in the European Union under the name Duaklir Genuair.
The deal marks a further push into respiratory drugs, outlining efforts to challenge market leader GlaxoSmithKline. Last year AstraZeneca boosted its portfolio of respiratory drugs via $2.1 billion deal with Spanish pharmaceutical firm Almirall.
The company is looking for new ways to generate revenue after the patent protection of its acid reflux drug Nexium expired and its cholesterol medication Crestor is set to lose its protection as well in 2016.
Last year the company rebuffed a $117-billion takeover bid from US-based Pfizer, with no projections of another offer coming after the US government dented the benefits from the so-called “inversion deals”.
On Thursday AstraZeneca also announced its fourth-quarter financial results, which came in below expectations.
The company reported a net loss of $321 million for the three months ended December 31, better than the negative result of $520 million it stated a year earlier.
Revenue came in at $6.68 billion or down 2% from last year and also below projections of $6.76 billion. Excluding the impact of currency shifts revenue grew 2%.
Core earnings per share fell 28% year-over-year to $0.76, in comparison, analysts had expected per-share earnings of $0.82 in the quarter.
During the three months the company saw major revenue declines in its top-selling drugs. Nexium reported a sales decrease of 13% to $832 million, while Synagis, designed to fend off the respiratory syncytial virus, dropped 22% to $404 million.
AstraZeneca projected a revenue decline of mid-single-digit percentage in 2015, while core earnings per share are expected to grow by a low-single-digit percentage.
The company said it would invest additional funds into research and development, last year the company spent 15% more on new products to a total of $4.94 billion.
“2014 was a remarkable year for AstraZeneca. We achieved a record six product approvals as we accelerated our pipeline across all main therapy areas,” said Chief Executive Pascal Soriot.
AstraZeneca gained 1% on Wednesday and closed at GBX 4 688 in London. On Thursday the stock lost 3.47% to GBX 4 526 at 12:51 GMT, marking a one-year increase of 16.79%. The company is valued at £59.16 billion.
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