By Ben Hirschler
LONDON (Reuters) - AstraZeneca is to buy U.S. respiratory drug specialist Pearl Therapeutics for up to $1.15 billion as Britain's second biggest drugmaker steps up a drive to rebuild its product pipeline via deal-making.
The acquisition of the privately held company secures AstraZeneca a position in the emerging market for a new class of lung treatments known as LABA/LAMA drugs that promise improved patient compliance and disease control, without steroids.
Some industry analysts believe that LABA/LAMA inhalers are set to dominate future therapy for chronic obstructive pulmonary disease (COPD), which causes debilitating breathlessness and affects an estimated 210 million people worldwide.
AstraZeneca said on Monday it will pay an initial $560 million plus up to $450 million if certain development milestones are hit as well as sales-related payments of up to a further $140 million.
The transaction is an important bet by new chief executive Pascal Soriot, who took over last October, on the British company's respiratory business, which he has identified as a core business area.
AstraZeneca's sales and profits are falling as older medicines lose patent protection and the company badly needs new products to replace former big sellers like the antipsychotic Seroquel, which lost exclusivity last year.
It already has a successful existing inhaled respiratory drug in Symbicort but had risked falling behind rivals like GlaxoSmithKline and Novartis in the race to bring LABA/LAMA inhalers to market.
Pearl's lead product, PT003 is in final-stage Phase III clinical trials and is a fixed-dose combination of formoterol fumarate, a long-acting beta-2-agonist (LABA) and glycopyrrolate, a long-acting muscarinic antagonist (LAMA).
It also has another product called PT010 that is a triple-combination medicine, combining the LAMA and LABA components of PT003 with an inhaled corticosteroid. AstraZeneca said this triple combination drug could be accelerated into Phase II clinical development.
The deal, which is expected to close in the third quarter of 2013, will have no impact on AstraZeneca's financial guidance for the year, the company said.
Pearl's backers, who stand to gain from the sale, include 5AM Ventures, Clarus Ventures, New Leaf Ventures and Vatera Healthcare Partners.
(Editing by Paul Sandle and Greg Mahlich)