Zacks analysts view AstraZeneca/Forest deal favorably

Following the announcement on August 12 by UK drug major AstraZeneca that it has entered into a co-development deal with the USA's Forest Laboratories on ceftraroline, analysts at Zacks Equity Research regarding the collaboration as a step in the right direction. 'Forest is exploring alternatives in an attempt to guard against waning sales after its anti-depressant drug Lexapro [escitalopram oxalate] loses patent exclusivity in 2012. The drug accounts for over half of the company's top line,' they said.

AstraZeneca's strong global sales and marketing team (in Europe mainly) will complement Forest's strength in the USA. The companies expect to file a New Drug Application in the USA by end of this year and a Marketing Authorization Application in Europe by the end of 2010, the analysts note.
Earlier this month, Forest signed another deal with Nycomed for the US rights of its lung drug Daxas (roflumilast), which is yet to receive approval from regulatory authorities (expected by next year). Forest made an upfront payment of $100 million for the drug.

Another $500 million will be paid based on successful regulatory approvals and upon achievement of sales milestones. Daxas could record robust sales on approval and would compete with GlaxoSmithKline's Advair (fluticasone propionate), with sales of £4.1 billion in 2008, in the chronic obstructive pulmonary disease (COPD) market.