AstraZeneca, Merck deal

AstraZeneca and Merck amended the terms of a 2010 option for AstraZeneca to acquire Merck's U.S. interest in AstraZeneca's gastrointestinal drugs Prilosec omeprazole and Nexium esomeprazole. The proton pump inhibitors (PPIs) are part of the companies' JV, AstraZeneca L.P., which markets AstraZeneca's drugs in the U.S. AstraZeneca can now exercise the option between March 1, 2014, and April 30, 2014, for $327 million plus a multiple equal to 10 times 1% of Merck's average annual profits from the JV for the three years prior to the option exercise. AstraZeneca said it expects the multiple to be about $80 million. Previously, AstraZeneca's option was exercisable this year at a price to be determined by third-party appraisals. Merck remains eligible to receive up to 5% of U.S. sales of Vimovo esomeprazole/naproxen if AstraZeneca exercises the option. Vimovo is partnered with Pozen Inc. (NASDAQ:POZN, Chapel Hill, N.C.)

AstraZeneca received the option in 2010 when it exercised a separate option to acquire Merck's interest in four other AstraZeneca drugs for $647 million (see BioCentury, March 8, 2010). ...