AstraZeneca confirmed Thursday that it would pay an initial $600 million to buy Actavis’ branded respiratory business in the U.S. and Canada.
The British pharmaceutical giant also reported a sharper-than-anticipated drop in fourth-quarter profits.
AstraZeneca’s second respiratory acquisition
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The UK drugmaker, AstraZeneca is under pressure to ramp up new sources of growth to offset loss of patent protection on a series of older products. The pharmaceutical giant’s sales were forecast to slip into decline this year as generic competition arrives for its blockbuster heartburn drug Nexium.
The drugmaker is also under pressure to justify its decision last year to reject a £69.4 billion takeover offer from Pfizer.
AstraZeneca’s deal with Actavis involved the Tudorza Pressair and Duaklir Genuair medicines for breathing difficulties, strengthening its position in the U.S. and Canadian respiratory markets. The combined annual revenues of the two drugs crossed $230 million in 2014.
The UK drugmaker also paid $2.1 billion last July for respiratory assets from Almirall of Spain in a similar deal to flesh out its drugs portfolio.
Earlier it was reported that Pfizer Inc. might be interested in acquiring Actavis plc, as Pfizer was looking for ways to reduce the amount of taxes it pays while also gaining a new pipeline of products.
AstraZeneca’s disappointing fourth quarter
AstraZeneca also unveiled a disappointing set of fourth-quarter numbers on Thursday. The British pharmaceutical giant posted a net loss of $321 million, compared with a loss of $524 million a year earlier. Its sales fell 2% to $6.68 billion, missing a consensus forecast of $6.85 billion according to a Wall Street Journal pool of 11 analysts.
The company cited increased investment in new products and growth markets as reasons for the squeeze in profits. The UK drugmaker’s pre-tax profits for the final three months of 2014 were $1.07 billion, excluding restructuring costs and other exceptional items. Its core earnings per share of 76 cents were below analysts’ average expectation for 82 cents.
Mirroring its disappointing performance, AstraZeneca’s shares were down 1.8% in London midmorning trading.
However, exuding confidence regarding future performance, AstraZeneca’s chief executive Pascal Soriot said the company was on course to return to growth by 2017 and “well-positioned” to deliver its long-term target to enhance revenues by three-quarters over the next decade. He also reiterated the drugmaker’s commitment to invest heavily in 2015.
Taking an optimistic tone over the latest acquisition, Paul Hudson, president of AstraZeneca U.S., said: “With the addition of (respiratory drugs) Tudorza and Daliresp, we will benefit from an immediate boost to revenue in our biggest market, further strengthening our growing respiratory franchise”.