AstraZeneca strikes $700m deal with Dublin-based Actavis

Drugs giant AstraZeneca is to boost its portfolio with the acquisition of a branded respiratory drug business for up to US $700m (€613m).

The agreement with Dublin-based rival Actavis to buy its respiratory business in North America includes the purchase of inhalation powder Tudorza Pressair, used by sufferers of chronic bronchitis.

AstraZeneca also posted an annual operating profit down 42% to $2.1 billion, missing market forecasts due to weaker fourth quarter trading after an operating loss of $349 million. Shares fell almost 2%.

The firm said it turned in a fourth quarter loss as it continued to invest in its drugs pipeline and treatments with growth prospects. It added that research and development costs jumped 17% to $1.4 billion in the period.

Last year, AstraZeneca chief executive Pascal Soriot fought off a €92 billion takeover bid from US rival Pfizer.

AstraZeneca warned the proposal brought uncertainty and risk for its shareholders and undervalued the company and its “attractive prospects”.

The firm said its acquisition from Actavis builds on the purchase of Spanish rival Almirall’s respiratory portfolio last year.

AstraZeneca US executive vice president Paul Hudson said the acquisition would bring long-term value to one of the company’s key growth platforms.

AstraZeneca said at the end of last year it had 133 drugs in its pipeline, of which 118 are in clinical development.

Mr Soriot said: “2014 was a remarkable year for AstraZeneca. We achieved a record six product approvals as we accelerated our pipeline across all main therapy areas.

“Alongside this, we delivered four quarters of revenue growth, with growth platforms now contributing over half of our revenues.”

But ETX Capital market analyst David Piper said: “After a year of investment in its drug pipeline, AstraZeneca’s earnings per share fell more than expected in the fourth quarter, dragging the full year number short of the market’s target.”