AstraZeneca opts to buy out rights to certain products from US Merck & Co JV for $647 million

Anglo-Swedish drug major AstraZeneca says that it will exercise one of its options under the provisions of the agreements relating to the restructuring of the AstraZeneca and Merck & Co joint venture in the USA, to get back rights to certain products, agreeing to pay its US partner $647 million for these in April. The UK-headquartered company's stock gained 1.6% to £29.31 in mid-afternoon London trading yesterday.

On closing this particular option, AstraZeneca will purchase from Merck rights to certain products including the Crohn's disease drug Entocort (budesonide) and the antihypertensives Atacand (candesartan cilexetil), and Plendil (felodipine), and certain other products still in development. This includes AstraZeneca's potential blockbuster blood-thinner Brilinta (ticagrelor), as well as AZD3355, AZD6765 and AZD2327, the UK company said.

In accordance with the agreements, in 2008 a calculation was made - the Appraised Value - which represented the net present value at that time of future contingent payments on the relevant products. AstraZeneca expects to close this option in April 2010, which will result in a payment to Merck equal to the AV of $647 million.