Aspen To Acquire AstraZeneca’s Anesthetics Drugs in $770-Million DealBy
Aspen Global Incorporated (AGI), part of the Aspen Group, has agreed to acquire the residual rights to AstraZeneca’s anesthetic medicines in a deal worth up to $770 million. These medicines include: Diprivan (propofol), EMLA (lidocaine 2.5% and prilocaine 2.5%), Xylocaine/Xylocard/Xyloproct (lidocaine HCl), Marcaine (bupivacaine hydrochloride), Naropin (ropivacaine Hcl), Carbocaine (mepivacaine), and Citanest (prilocaine).
AsraZeneca entered into an agreement with AGI in June 2016, under which AGI gained the exclusive commercialization rights to the medicines in markets outside the US. Under the new agreement, AGI will acquire the remaining rights to the intellectual property and manufacturing know-how related to the anesthetic medicines for an upfront consideration of $555 million. Additionally, AGI will pay AstraZeneca up to $211 million in performance-related milestones based on sales and gross margin during the period from September 1, 2017 to November 30, 2019. AstraZeneca plans to continue to manufacture and supply the medicines to AGI during a transition period of up to five years.
Under the original 2016 agreement, AGI made an upfront payment to AstraZeneca of $520 million and agreed to make future product sales-related payments of up to $250 million as well as pay double-digit percentage royalties on product sales. AstraZeneca agreed to continue to manufacture and supply the medicines to AGI on a cost-plus basis for an initial period of 10 years.
The new agreement does not impact the first product sales-related payment of $150 million due to AstraZeneca, for which the contingent terms have now been met. Under the new agreement, AGI will no longer pay royalties to AstraZeneca. The remaining $100 million product sales-related payment from the original agreement will be made to AstraZeneca in 2018, if the contingent terms are met.
The new, additional agreement is expected to close in the fourth quarter of 2017, subject to customary closing conditions and regulatory clearances.