Merck retains rights to AstraZeneca drugs

Source: Healthcare Digital

Date :29/02/2008 01:36:19

Merck & Co have decided not to surrender rights to a selection of AstraZeneca drugs in return for a one-off payment, until 2010 at least.

The medicines, Atacand, Lexxel, Entocort and Plendil, plus certain products currently in clinical development, will lead to a 2008 first quarter net cash outflow to Merck of $2.63 billion.

Merck’s decision not to relinquish the drugs means that Anglo-Swedish group AstraZaneca will not be paying out the estimated $3.3 billion in rights for the medicines.

Merck decision

Ed Seage, Executive Director of AstraZeneca investor relations, described some of the problems the group faces as a result of Merck’s decision:

"As part of these agreements, since they are entitled to receive a percentage of our sales, we have to maintain a certain level of promotional commitment and we can't launch a competing product that might impinge on their economic rights there."

AstraZeneca shares were down yesterday by 1.2 percent at 1,957 pence, valuing the firm at about £29 billion ($57.5 billion).

February 29, 2008