AstraZeneca sells antibiotics business to Pfizer for £1.2bn

The FTSE 100 group said the sale would reinforces its focus on developing medicines in its three main therapy areas, while realising value from what it said was a strong portfolio of established and late-stage antibiotics through Pfizer's commercialisation and development abilities.

An up-front payment of $550m on completion of the deal, which is expected in the fourth quarter of 2016, will be followed by an unconditional payment of $175m in January 2019 for the commercialisation and development rights to approved antibiotics Merrem, Zinforo and Zavicefta, as well as two still in development, ATM-AVI and CXL.

Furthermore, Pfizer will pay up to $250m in commercial, manufacturing and regulatory milestones, up to $600m in sales-related payments as well as recurring, double-digit royalties on future sales of Zavicefta and ATM-AVI in certain markets.

AstraZeneca, which generated product sales from Merrem and Zinforo in 2015 of $250m, said the agreement does not impact its financial guidance for 2016 and stressed that MedImmune's portfolio of biologic products such as FluMis and Synagis, and AstraZeneca's stake in Entasis Therapeutics, spun-off in 2015 and now operating as a stand-alone company, are not included as part of the agreement.

"This agreement reinforces our strategic focus to invest in our three main therapy areas where we can make the greatest difference to patients' lives," said Luke Miels, AstraZeneca's executive vice president for Europe and head of the antibiotics business unit.

"We're pleased that our strong science in antibiotics will continue to serve a critical public health need through Pfizer's dedicated focus on infectious diseases, ensuring these important medicines reach greater numbers of patients around the world."