AstraZeneca to get $250 million-plus from OTC Nexium deal with Pfizer

Anglo-Swedish drug major AstraZeneca (LSE: AZN) says it has entered into an agreement with Pfizer (NYSE: PFE), the world’s largest pharma company by revenues, for over-the-counter (OTC) rights to its prescription gastroesophageal reflux disease (GERD) drug Nexium (esomeprazole).

Under the terms of the deal, Pfizer will acquire the exclusive global rights to market Nexium for the approved over-the-counter indications in the USA, Europe and the rest of the world. In return, Pfizer will make an upfront payment of $250 million to AstraZeneca which is also eligible to receive milestone and royalty payments based on product launches and sales.

Based on the anticipated timing of the close of the transaction, AstraZeneca will recognize the upfront of $250 million as other income in 2012. This will increase core earnings per share for 2012 by around $0.16. As a consequence the core earnings per share target for 2012 is increased to the range $6.00 to $6.30, the London headquartered firm said.