* AstraZeneca paying $12.70/share plus CVR worth up to $4.70
* Deal at 88 percent premium; Omthera shares at $12.80 in
* Fish oil-based drug builds up AstraZeneca's heart business
* AZ shares up 3.2 pct, helped by generic asthma drug delay
By Ben Hirschler
LONDON, May 28 AstraZeneca is to buy
Omthera Pharmaceuticals for as much as $443 million to
build up its cardiovascular drug business, a priority area for
Britain's second-biggest drugmaker.
The acquisition of the U.S.-based specialist in fish
oil-derived medicine underscores a drive by new Chief Executive
Pascal Soriot to revive AstraZeneca's fortunes through a series
of bolt-on deals.
It is his second purchase in the cardiovascular field,
following the acquisition last month of AlphaCore Pharma, a
small early-stage U.S. biotechnology company.
The latest transaction pitches AstraZeneca into competition
with rivals including GlaxoSmithKline that already sell
heart-friendly fish oil drugs.
Omthera's leading drug has already completed final-stage
clinical tests and has the potential to be combined with
AstraZeneca's blockbuster cholesterol fighter Crestor. Helvea
analyst Odile Rundquist said the deal was "a good move as it
perfectly complements AstraZeneca's cardiovascular portfolio".
AstraZeneca's sales and profits are falling as older
medicines lose patent protection and the company badly needs new
products to replace former big sellers like the antipsychotic
Seroquel, which lost exclusivity last year.
AstraZeneca said on Tuesday it had entered into a definitive
agreement to buy Omthera for $12.70 per share, or approximately
$323 million, a premium of 88 percent to Omthera's closing price
In addition, Omthera shareholders will get "contingent value
rights" (CVRs) of up to approximately $4.70 per share, or $120
million in total, depending on the success of Omthera's
experimental drug Epanova, for treating patients with very high
triglycerides, a type of blood fat that is bad for the heart.
CVRs are being used increasingly in deals in the
pharmaceutical and biotechnology market to bridge differing
expectations surrounding new drugs whose final sales are
Shares in Omthera leapt 90 percent to $12.80 in premarket
dealings on Nasdaq.
SEEKING U.S. APPROVAL
Epanova is an ultra-pure mixture of the free fatty acid
forms of eicosapentaenoic acid (EPA) and docosahexaenoic acid
(DHA), derived from fish oil. It has already completed
final-stage Phase III clinical trials and is set to be submitted
for U.S. regulatory approval around the middle of this year.
The new drug will compete with other fish oil-based
medicines such as GlaxoSmithKline's Lovaza and Amarin's
recently approved Vascepa. AstraZeneca had, at one stage, been
tipped as a possible buyer of Amarin.
Lovaza last year generated sales of 607 million pounds ($917
million) for GSK in the United States and Puerto Rico, where the
company has marketing rights to the product.
Cardiovascular medicine is a key area for AstraZeneca, whose
top-selling drug is Crestor. The British-based group said it
intended to conduct a series of clinical studies testing a
fixed-dose combination of Crestor and Epanova. The new
combination, if successful, would extend the Crestor franchise
beyond 2016, when the drug's U.S. patent ends.
AstraZeneca is also banking on another heart drug, Brilinta,
to drive sales as older products go off patent.
Shares in AstraZeneca were up 3.2 percent at 3536.5 pence in
a strong London stock market by 1054 GMT. In addition to news of
the Omthera deal the stock was buoyed by news of a temporary
blockage on U.S. sales of rival generic versions of its asthma
drug Pulmicort Repsules, which was announced late on Friday.
The deal to buy Omthera has the backing of investors
representing 60 percent of the Princeton, New Jersey-based
company's shares. It is expected to close in the third quarter