Astra Merck: New Stand-Alone Company

Swedish pharmaceutical company Astra has paid $820 million to US company Merck & Co for a 50% stake in Astra Merck Incorporated (AMI), which from November 1 exists as a newly-created stand-alone company.

Astra and Merck signed an agreement relating to Astra Merck in 1991. The two companies have been collaborating since 1982. In the summer of last year sales of Astra products sold through Astra Merck surpassed the predetermined level established in the agreement, which opened up the option to establish Astra Merck, at that time a division of the Merck group, as a jointly-owned separate entity (Marketletters passim).

Astra has paid Merck the equivalent of 12 months of Astra Merck sales since they hit the trigger level, explained Hakan Mogren, president and chief executive of Astra, at a satellite conference held to announce the deal. He added royalties ceased to be paid to Astra as of November 1. Instead of royalties, Astra gets to share the profits of sales in the USA of its products Prilosec (omeprazole), Plendil (felodipine) and Tonocard (tocainide).