AstraZeneca said it entered into an agreement to acquire Pearl Therapeutics for $1.15 billion, in a deal that signaled the pharma giant’s intent to expand its presence in one core therapeutic area—respiratory disease.

AstraZeneca will pay $560 million up-front for Pearl, followed by $450 million tied to development and regulatory milestones for any triple combination therapies and selected future products AstraZeneca develops using Pearl’s technology platform, plus $140 million tied to exceeding sales milestones.

The deal for Pearl, which specializes in development of inhaled small molecule therapeutics for respiratory disease, is set to close during the third quarter. Once completed, AstraZeneca would expand its respiratory disease portfolio beyond its Symbicort, a maintenance treatment for asthma in patients six and older that combines the inhaled corticosteroid budesonide and the rapid and long-acting bronchodilator formoterol (Oxis) in a single inhaler.

Furthest along in AstraZeneca’s respiratory pipeline is Symbicort for chronic obstructive pulmonary disease (COPD) and asthma, for which the company planned to file for marketing authorization in the first half of 2014. In Phase II are three candidates for COPD: one for asthma and COPD, one for asthma alone, and one for asthma and idiopathic pulmonary fibrosis. AstraZeneca has three more candidates for asthma and two for COPD in Phase I.

The deal would add to AstraZeneca’s respiratory drug offerings Pearl’s lead product for COPD, PT003, now in late-stage development with a U.S. regulatory application set to be filed in mid-2015, to be followed by filings in the EU and Canada.

PT003 is a fixed-dose combination of formoterol fumarate, a long-acting beta-2-agonist (LABA) and glycopyrrolate, a long-acting muscarinic antagonist (LAMA). Last month, Pearl launched The PINNACLE global Phase III program for PT003, designed to test the drug’s effect on improvement in lung function in individuals with moderate to severe COPD. PT003 is delivered via a pressurized metered dose inhaler (pMDI) using Pearl’s co-suspension formulation technology.

AstraZeneca said it plans to explore a triple fixed-dose combination LABA/LAMA and inhaled corticosteroid or ICS that could be accelerated into Phase II development. Pearl’s pipeline includes such a product, the preclinical PT010, a twice-daily, single-inhaler drug for which, according to the company’s website, “evaluation [is] currently focused on selecting an ICS.”

Pearl’s pipeline also includes PT001, a glycopyrrolate for COPD; and PT005, a formoterol fumarate for moderate-to-severe COPD.

The deal would also bring to AstraZeneca Pearl’s inhaler and formulation platform for future combination products.

“The agreement will enable us to offer further distinctive treatment options across the full spectrum of COPD and asthma to patients, physicians and payers,” AstraZeneca CEO Pascal Soriot said in a statement.

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