Sobi Completes $2.3 Billion Acquisition of AstraZeneca’s RSV Therapeutics Synagis and MEDI8897

January 31, 2019 News /BioonBIOON/ -- Swedish pharmaceutical company Swedish Orphan Biovitrum AB (SOBI) recently announced the completion of its acquisition ofAstraZenecaAcquisition of U.S. rights to Synagis (palivizumab), a drug for lower respiratory tract infections. Additionally, the company is entitled to receive 50% of the future revenues from AstraZeneca’s candidate drug MEDI8897 in the U.S. market. Under the previously signed agreement, 130 AstraZeneca employees associated with these two assets will transfer to Sobi.

Synagis (palivizumab) is a medication for the prevention of serious lower respiratory tract infections (LRTI) caused by respiratory syncytial virus (RSV) in high-risk infants and young children, and it is the only drug approved for the prevention of severe RSV disease.

MED8897 is a next-generation RSV antibody drug. It is an experimental monoclonal antibody indicated for the prevention of RSV-induced lower respiratory tract infection (LRTI) in the general infant population. The drug achieves neutralization of RSV by binding to the respiratory syncytial virus (RSV) fusion (F) protein expressed on the surface of viral particles and infected cells.

RSV is the most common cause of acute lower respiratory tract infections in children. In the United States, approximately 2.5 million pediatric cases annually are severe enough to require medical treatment. Despite years of research and development, no therapeutic drug for RSV has been approved for market release. Therefore, prevention remains the only current strategy against this disease.

This transaction also represents AstraZeneca’s continued effort to divest assets and focus on its core therapeutic areas. By selling the U.S. rights to Synagis and MED8897, AstraZeneca received $1 billion in cash, along with shares representing an 8% equity stake in Sobi (valued at approximately $500 million). Additionally, AstraZeneca is eligible to receive up to $815 million in milestone payments, bringing the total value of the deal to $2.3 billion.

For Sobi, this acquisition has three major highlights:

(1) It will diversify Sobi’s revenue base in specialty care–immunology: Synagis is the only approved RSV prophylactic therapy for high-risk infants, complementing Sobi’s expertise in pediatrics and immunology. Synagis enhances the significance of Sobi’s immunology franchise (comprising Kineret®, Emapalumab, and Synagis),Immunologywill account for the majority of total professional care sales;

(2) Accelerate the development of Sobi’s U.S. commercial platform: The acquisition of Synagis is expected to more than double the revenue and scale of Sobi’s U.S. organization, thereby increasing the U.S. contribution to Sobi’s total revenue to approximately one-third. The integration of Synagis’s established U.S. sales and marketing organization will create critical scale, further driving Sobi’s sustainable growth in the U.S. market;

(3) Enhancing Financial Capability: The addition of top-line assets will bring substantial recurring revenue to Sobi, further driving expansion in the U.S. market and enabling future strategic acquisitions in the medium term, thereby preparing the company for its next phase of growth. As of June 30, 2018, Synagis generated semi-annual sales of $269 million. Sobi expects this product to deliver an EBITA margin exceeding 60%, with the transaction accretive to earnings per share in 2019. (Bioon.com)

Original source:Sobi buys AstraZeneca’s RSV virus drug for $1.5bn