Pfizer Inc said it would pay about $250 million to gain access to exclusive global rights for the over-the-counter version of British drugmaker AstraZeneca Plc's heartburn pill Nexium.
The U.S. drugmaker also cut its full-year profit forecast to reflect the impact of the deal and said it expects to spend more on research and development.
Pfizer expects full-year 2012 research and development expenses of between $6.75 and $7.25 billion, up from its prior range of $6.5 to $7.0 billion.
The company expects a full-year profit of between $2.12 and $2.22 per share, down from its prior forecast of between $2.14 and $2.24 per share.
Analysts were expecting earnings of $2.22 per share for the year, according to Thomson Reuters I/B/E/S.
AstraZeneca, which will continue to manufacture and market the prescription version of Nexium, would be eligible to get milestone and royalty payments from Pfizer based on the launch and sales of the over-the-counter (OTC) version.
Acid reflux treatment Nexium was AstraZeneca's second-largest seller in the April-June period. But like several other drugs in its portfolio, generic competition has been hurting Nexium sales.
Revenue from Nexium fell 13 percent in dollar terms to $949 million in the second quarter.
Pfizer said it expects to begin marketing OTC Nexium in 2014, which is also when the drug's prescription version loses patent protection.
The company said a marketing application for Nexium's over-the-counter version was filed with European health regulators in June. The application for U.S. approval is expected to be filed in the first half of 2013.
Under the agreement, AstraZeneca would also supply Pfizer with OTC Nexium, upon regulatory approval.
The companies said they are also exploring the potential for similar partnerships for other AstraZeneca prescription drugs for which OTC versions may be appropriate.
Pfizer's shares closed at $23.72 on Monday on the New York Stock Exchange.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Supriya Kurane)