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AstraZeneca Sells Atacand's European Rights to Cheplapharm

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AstraZeneca Sells Atacand's European Rights to Cheplapharm

AstraZeneca (AZN) sells Atacand and Atacand Plus' European rights to Cheplapharm Arzneimittel for $210 million.

AstraZeneca Plc AZN announced that it has sold its European rights to Atacand and Atacand Plus to Cheplapharm Arzneimittel for $210 million. Per the terms of the agreement, AstraZeneca will receive $200 million upon completion of the deal. The company is also eligible to receive another $10 million as time-bound/sales-based milestone payments. However, AstraZeneca will retain all the rights to Atacand and Atacand Plus in the rest of the world.

The deal is expected to be completed in the third quarter of 2018.

Atacand, a selective, AT1 subtype angiotensin II receptor antagonist blocker (ARB), is prescribed for the treatment of hypertension and heart failure. Atacand Plus, a combination therapy is administered when the monotherapy (Atacand) fails to deliver.

Notably, Atacand was developed in collaboration with Takeda Pharmaceutical Company.

Global product sales for Atacand and Atacand Plus were $300 million in 2017 including $86 million in Europe. However, in the first quarter of 2018, Atacand sales were down 9% to $71 million.

We like to remind investors that lately, AstraZeneca is facing a significant generic competition. Core products like Nexium, Seroquel XR and Crestor are fighting generic rivalry, which is hurting near-term earnings growth. Atacand, Toprol-XL and Merrem are also struggling with the same issue in the United States. The genericization of key products will make it challenging enough for the company to drive its top line.

Shares of AstraZeneca have gained 7.1% year to date versus the industry’s decline of 1.4%.

AstraZeneca currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the pharma sector include Vanda Pharmaceuticals Inc. VNDA, Illumina, Inc. ILMN and Eli Lilly and Company LLY. While Vanda Pharmaceuticals and Illumina sport a Zacks Rank #1 (Strong Buy), Eli Lilly carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vanda Pharmaceuticals’ earnings estimates have been revised 11.1% upward for 2018 and 3.9% for 2019 over the past 60 days. The stock has surged 37.7% so far this year.

Illumina’s earnings estimates have been moved 0.2% north for 2018 and 0.1% for 2019 over the past 60 days. The stock has soared 42.4% so far this year.

Eli Lilly and Company’s bottom line per share estimates have been raised 0.2% for 2018 and 1.5% for 2019 over the past 60 days. The stock has increased 5.3% year to date.

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