AstraZeneca PLC (AZN - Free Report) announced an agreement to sell rights to Seroquel and Seroquel XR, its drugs for the treatment of schizophrenia and bipolar disease, in the United States and Canada to German pharmaceutical company Cheplapharm Arzneimittel GmbH.
We remind investors that earlier in October, AstraZeneca sold rights to Seroquel and Seroquel XR in Europe and Russia to Cheplapharm.
The transactions are part of the company’s efforts to focus on reducing the number of mature medicines for enabling reinvestment in the main therapy areas of Oncology, Cardiovascular, Renal & Metabolism and Respiratory.
Per the company, Seroquel recorded sales of $36 million in 2018 while Seroquel XR generated $79 million sales in North America during the period.
Under the agreement, AstraZeneca will get an upfront payment of $35 million and may also earn future sales-contingent fees of up to $6 million. The company will continue to manufacture and supply the products during a transition period.
Shares of AstraZeneca have rallied 26% so far this year, outperforming the industry’s increase of 5.9%.
It is important to note that AstraZeneca lost exclusivity for Seroquel/ Seroquel XR in the United States following the launch of the products’ generic versions. Moreover, the company’s core drugs like Nexium and Crestor are facing generic competition, which is hurting sales.
Notably, the bipolar depression market is highly competitive as multiple companies are trying to introduce treatments for the disease. Other players in the bipolar disorder and schizophrenia treatment market include Johnson & Johnson's (JNJ - Free Report) Risperdal Consta and Allergan's Vraylar.
Meanwhile, in November 2019, Alkermes plc. (ALKS - Free Report) submitted a new drug application (NDA) to the FDA seeking approval of ALKS 3831 (olanzapine/samidorphan) for the treatment of schizophrenia and bipolar I disorder. Alkermes’ Aristada Initio is already approved to address schizophrenia in adults.
AstraZeneca currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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