AstraZeneca to acquire Pearl Therapeutics to strengthen respiratory portfolio

AstraZeneca announced today that it has entered into a definitive agreement to acquire Pearl Therapeutics, a privately held company based in Redwood City, California, focused on the development of inhaled small-molecule therapeutics for respiratory disease.

The acquisition will give AstraZeneca access to a potential new treatment for chronic obstructive pulmonary disease (COPD), currently in late-stage development, and inhaler and formulation technology that provides a platform for future combination products.

Pearl’s lead product, PT003, is a fixed dose combination of formoterol fumarate, a long-acting beta-2-agonist (LABA) and glycopyrrolate, a long-acting muscarinic antagonist (LAMA). LABA/LAMA combinations are expected to become an important new class of treatment for COPD. A global Phase III programme has been initiated and will test the improvement in lung function in individuals with moderate to severe COPD in response to PT003. PT003 is delivered by inhalation via a pressurised metered dose inhaler (pMDI) using Pearl’s novel co-suspension formulation technology. This technology platform will allow AstraZeneca to explore combinations of existing and novel technologies, including a triple fixed dose combination (LABA/LAMA and inhaled corticosteroid) which could be accelerated into Phase II clinical development.

Under the terms of the agreement, AstraZeneca will acquire 100% of Pearl’s shares for initial consideration of $560 million payable on completion. In addition, deferred consideration of up to $450 million becomes payable if specified development and regulatory milestones in respect of any triple combination therapies and selected future products that AstraZeneca develops using Pearl’s technology platform are achieved. Sales-related payments of up to a further $140 million are payable if pre-agreed cumulative sales thresholds are exceeded resulting in a total potential acquisition cost of up to $1.15 billion. The proposed transaction is subject to customary regulatory approvals and is expected to close in the third quarter of 2013.

Pascal Soriot, Chief Executive Officer of AstraZeneca, said: “Chronic obstructive pulmonary disease continues to increase worldwide and there is a growing need for the next generation of inhaled combination products. Pearl’s novel formulation technology, together with its development products and specialist expertise are a great complement to AstraZeneca’s long-established capabilities in respiratory disease, one of our core therapy areas. Combined with our on-market portfolio, including Symbicort, and our strong pipeline, the agreement will enable us to offer further distinctive treatment options across the full spectrum of COPD and asthma to patients, physicians and payers.”

Kevin Ferro, Chairman of the Board of Pearl Therapeutics and CEO of Vatera Healthcare Partners, Pearl’s lead investor, added: “We have been impressed with AstraZeneca’s expertise, focus and speed of execution and are delighted to be joining the group, a global leader in respiratory disease, as we believe that Pearl will be an excellent fit for its respiratory portfolio. We believe AstraZeneca will provide significant value in supporting the further development and registration of our lead product, PT003, and in leveraging our technology platform to realise future products including a triple agent therapy for respiratory disease. I would like to thank Pearl’s partners, management team and everyone on the Pearl team for the extraordinary contributions that they have made to progress the company to this stage. We are looking forward to working with AstraZeneca to realise the full potential of the Pearl portfolio and to offer a range of therapies to dramatically improve patients’ lives.”

The acquisition of Pearl Therapeutics has no impact on AstraZeneca’s financial guidance for 2013.