Merck & Co Inc And AstraZeneca PLC Agree To Amend Partnership

Merck & Co Inc, known as MSD outside the United States and Canada announced that Merck and AstraZeneca PLC have amended the option agreement related to their partnership known as AstraZeneca LP (AZLP). The updated agreement provides that AstraZeneca will not exercise its option to acquire Merck's remaining interest in AZLP in 2012, and provides AstraZeneca a new option to acquire Merck's partnership interest in June 2014. As a result of the amended agreement, Merck will continue to record supply sales and equity income from the partnership for the remainder of 2012 and 2013. In 2014, AstraZeneca now will have the option to purchase Merck's remaining interest in AZLP based in part on an agreed-upon calculation of the value of Merck's interest in Prilosec and Nexium. AstraZeneca's option is exercisable between March 1, 2014, and April 30, 2014. If AstraZeneca chooses to exercise this option, the closing date is expected to be June 30, 2014. Under the amended agreement, the agreed-upon valuation for Merck's interest in Nexium and Prilosec for the 2014 exercise is a fixed sum of $327 million, subject to a true-up in 2018, based on actual sales from closing in 2014 to June 2018. Also, the exercise price will include an additional amount equal to a multiple of ten times Merck's average one percent annual profit allocation in the partnership for the three-years prior to exercise.