Circassia soars as collaboration with AstraZeneca terminated

Shares of UK-based specialty pharma firm Circassia Pharmaceuticals (LSE: CIR) shot up more than 30% to 22.90 pence by late morning today, after it announced that it was halting a licensing deal on two respiratory drugs in the USA.

Circassia revealed that its board of directors has concluded that it is in the best interests of the company to terminate the 2017 development and commercialization agreement with AstraZeneca (LSE: AZN) for the US commercial rights to two inhaled chronic obstructive pulmonary disease (COPD) drugs Tudorza (aclidinium bromide) and Duaklir (formoterol fumarate dihydrate/aclidinium bromide).

On completion of the transaction, AstraZeneca will acquire the US commercial rights to Tudorza and Duaklir together with certain ancillary rights and assets, from Circassia the consideration for which will be equal to, and be satisfied by way of set-off against, the entirety of the loan amount outstanding to AstraZeneca, together with accrued interest owed by Circassia to AstraZeneca, which was approximately $149.9 million as at the date of announcement. AstraZeneca will retain its 18.9% shareholding in Circassia. Subject to receipt of necessary approvals, it is anticipated that the transaction will complete in no longer than three months.