Swedish pharma Sobi has inked a $1.5 billion cash and equity deal to secure rights to two AstraZeneca drugs that it believes will strengthen its position both in the U.S. market as well as the broader rare disease field.
The agreement would put Sobi in charge of stateside commercialization of Synagis, a drug first greenlighted in 1998 for the prevention of serious lower respiratory tract infections caused by respiratory syncytial virus (RSV). Sobi also gains the right to participate in 50% of future U.S. earnings for MEDI8897, a follow-on candidate from AstraZeneca that’s aimed at a larger patient population.
Aside from its upfront payment, Sobi agreed to a few hundred million dollars worth of potential milestone payments for MEDI8897 and up to $470 million in sales-related milestones for Synagis. Those latter milestones would kick off in 2026.
A little over a year ago, Jefferies disclosed that Guido Oelkers, who at the time had just started at the helm at Sobi, told the investment bank his main focus was to “acquire marketed products” to quickly beef up the company’s top and bottom line.
With Synagis (palivizumab), Oelkers is beginning to see that focus materialize.
The drug raked in $687 million for AstraZeneca last year. Though on the market for two decades, Synagis benefits from being the only Food and Drug Administration approved RSV prophylaxis for high-risk infants. It also has some time left in its patent runway, with main patents in the U.S. and Europe not set to expire until 2023.
For Sobi, AstraZeneca’s medicines help its immunology business expand further. There, the company already had Kineret (anakinra), a therapy for rheumatoid arthritis and neonatal-onset multisystem inflammatory disease. And in July, it added a late-stage inflammation drug, emapalumab, to its pipeline in a deal with Novimmune worth potentially more than $450 million.
“So essentially, immunology now becomes the second leg to Sobi and it helps us to articulate what specialty care is about,” Oelkers said on a Nov. 13 conference call, explaining how the deal with AstraZeneca affects the company.
“At the same time, we still have the other businesses that will give us opportunities for further diversifying the group,” he added.
Per deal terms, Sobi will pay AstraZeneca $1 billion in cash and $500 million in newly issued common shares — giving the British pharma an 8.1% stake in the smaller drugmaker, according to a Nov. 13 statement.
Sobi also agreed to pay its partner $175 million once a Biologics License Application for MEDI8897 has been submitted to the FDA. Other profit- and development-related milestones could have AstraZeneca taking home an additional $110 million. Sobi said it expects MEDI8897 milestone payments to come in 2023 or after.
The companies expect their agreement to close by early 2019 at the latest.