Meda buys global rights to Novartis' Elidel for $420 million

Swiss drug major Novartis(NOVN: VX) has signed an agreement to sell to Swedish drugmaker Meda AB (MEDA: SS) the global rights to manufacture, market and commercialize Elidel (pimecrolimus) cream 1%, a treatment for mild to moderate atopic dermatitis. This agreement reflects Novartis strategy to focus commercialization on new launch portfolio and core brands, the company said.

On closing, Novartis will receive an upfront payment of $420 million from Meda which will assume the global manufacturing of Elidel within three years after closing. The accounting gain is expected to be about $406 million - around $345 million to be recognized by the end of 2011 and the remainder in 2012 and 2013.

The agreement will be filed for review with the USA and certain other antitrust authorities and, subject to certain closing conditions, the transaction is expected to close during the second quarter of 2011.